Fundraising Guide
A comprehensive guide to raising venture capital for your startup.
When to Raise
Raise when you have leverage. Ideally, raise when you don't desperately need the money. The best time to raise is when you have strong traction, clear milestones ahead, and runway remaining.
Signals you're ready
- Product-market fit signals (retention, NPS, organic growth)
- Clear use of funds that accelerates growth
- 6+ months runway remaining
- A story that excites investors
How Much to Raise
Raise enough to hit meaningful milestones with 18-24 months runway. Don't raise too little (you'll be fundraising again soon) or too much (excessive dilution).
Rule of thumb
- Pre-seed: $500K - $2M
- Seed: $1M - $5M
- Series A: $5M - $15M
Factor in your burn rate, hiring plans, and the milestones needed for your next raise.
Choosing Investors
Not all money is equal. The best investors add value beyond capital through introductions, advice, and credibility.
What to look for
- Relevant sector expertise
- Portfolio companies you can learn from
- A partner who will champion you
- Founder references (always check!)
- Reasonable terms and reputation
The Pitch Process
Fundraising is a sales process. Create urgency, run a tight process, and don't let it drag on.
Typical timeline
- Weeks 1-2: Warm up relationships, refine materials
- Weeks 3-6: First meetings, partner meetings
- Weeks 7-8: Term sheets, negotiation
- Weeks 9-10: Due diligence, closing
Run a parallel process. Meet with multiple investors simultaneously to create competition.
Negotiating Terms
Focus on what matters: valuation and liquidation preference. Don't sweat standard terms.
Worth negotiating
- Pre-money valuation
- Option pool size
- Board composition
- Liquidation preference structure
Usually standard
- Pro-rata rights for lead investors
- Information rights
- Basic protective provisions
After Closing
The real work begins after you close. Set expectations with your investors from day one.
Best practices
- Send monthly investor updates
- Ask for specific help (intros, advice)
- Be transparent about challenges
- Celebrate wins and share learnings