1. It costs money to raise money.
To raise capital, you must set aside funds. You will need to attract investors, generate clarity and interest, gain their trust, and then close the deal.
(It is not yet over)
After closing, you must continue to communicate with current investors while also reaching out to prospective investors. It’s a part-time job on top of your full-time one.
2. Investors can change their opinions at any time.
Your raise will not be complete until you see money in the bank. Continue to hustle up to that point. Make new relationships, contact possible investors, submit monthly updates, and so on.
3. If you don’t have a network, it could take up to 12 months.
The reality is that you must first gain the trust of investors before they will write a check. If you don’t know them yet, start talking to them right away so you can build a relationship before your deadline.
4. It is only getting worse until 2024
This year is more difficult than previous year; 2023 may be even more difficult. Don’t underestimate the difficulty of raising cash, especially beyond 2021. You must be more vigilant, meet with more investors, and possibly lower the minimum check size at the start of the round.
5. What’s in it for VC ?
You’ll discover that your offering isn’t as competitive as you thought it was.
Founders who are soliciting funds for the first time are often overly thrilled by investor interactions. They believe they can just sit and wait because they had 5 promising conversations with investors. That is the most serious error you can make.
Hundreds of deals are presented to investors. To stand out, create relationships, and consistently present milestones, you need a strategy.
