Busy finances Markets, rising interest rates and an uncertain economic future are injecting some negative prospects into the market, shifting the power volatility to investors. The growth of the last decade, and especially the bubble of 2021, has faded considerably, and that means startups looking for investment need to adjust their approach and learn what they learned during the bubble.
I have invested in over 250 companies and founded an all-in-one banking platform for startups and have had a front row seat to what companies at various stages are experiencing. I’ve noticed trends that are re-relevant to old ways of fundraising.
Below is a mix of my best practices and advice for anyone trying to raise money to start up in this climate.
Do not collect money in summer or winter
During Covid, VCs started taking meetings from July to August and even in November and December. But that was hardly the case before the outbreak. I’m seeing it change now. It’s a good idea to use the extra time you have now to develop a solid game plan that you can implement while investors are living and engaged.
Ownership and management requirements will again become more important, so plan for it when you list investors to pursue.
Get the deck and data room ready
Over the past few years, capital has been abundant, which has created a trend toward unpreparedness for fundraising.
Shortcuts are no longer a good idea. They should have a deck, briefing room and forecast keys ready to pitch to investors before going to the meeting. This allows VCs to do their due diligence and shows them that you are serious.
Be prepared to show more progress
Regardless of the level of your company, you are expected to grow more in recent years, so prepare to protect your growth. At the pre-seed stage, you should have a prototype. In Serie A, you need to show revenue, and in Serie A, you probably need to have evidence to show product-market fit.
