7 harsh truths about raising capital that drives me nuts.

In this Twitter-like post, I just go through the facts and observations I had for the last 2 years of being active in helping founders raise capital.

Let’s dive in.

1/ Raising capital never ends. Once you go that route, you are raising pre-seed, seed, seed+, and series A.. and if each round takes up to 6 months, in the course of 5–7 years, you are raising for at least half of that. Be prepared.

2/ VCs and angels invest like wolves. In pact. Once you get the attention of a lead investor, make sure you drive warm intros and expand on that. Milk that relationship.

3/ Cold outreach can take you places you never can imagine. It must be direct, radically short and only talking about traction. Ideas are worthless.

4/ Ask for help from VC scouts. VC scouts have strong relationships with investors and they charge a finder fee (normally a commission) to make intros.

5/ Investors are constantly looking for great startups to invest in. Double down on content. Create content that attracts investors.

6/ Fundraising is stressful and hard. Especially for first-time founders. Founders are normally busy with building the business (product, sales, marketing, legal, finance, hiring) and then fundraising is yet another headache. In fact, fundraising may become a full-time job.

7/ The generation of investors that invest in an idea on a napkin is long gone. Show traction. Traction is the only KPI that counts.

Conclusion

There have never been as many options for companies seeking to raise debt or equity capital.

On the other side, there are so many startups looking to raise capital and it becomes very hard to get investors’ attention.

At the time of writing, California-based startups could raise close to $90B in the capital only in 2022. But the fact that if you are a first-time founder and struggling to navigate the process — Capitaly can prepare you in the investors’ eyes.

Talk to Capitaly today about the essential role that our platform plays in enabling startups to take this leap.