7 harsh truths about raising money for your startup no one's told you about (until now):
🔹 It's a Long Process
Most founders underestimate how long it takes to raise capital.
If you leave the raise too late, you could end up being forced to accept sub-optimal terms to keep your startup alive.
Allow AT LEAST 12 months in your capital raise process.
Most founders underestimate how long it takes to raise capital.
If you leave the raise too late, you could end up being forced to accept sub-optimal terms to keep your startup alive.
Allow AT LEAST 12 months in your capital raise process.
🔹 It's A Distraction
Raising capital will consume a lot of time and attention of your team.
They'll have to manage the raise while also managing their day job, which will be daunting.
Make sure you resource your team appropriately to avoid things slipping through the cracks.
Raising capital will consume a lot of time and attention of your team.
They'll have to manage the raise while also managing their day job, which will be daunting.
Make sure you resource your team appropriately to avoid things slipping through the cracks.
🔹 You're Outgunned
VCs have negotiated countless more deals than you have.
You'll be entering the negotiations at a significant disadvantage.
Be very clear on what your non-negotiable terms are and get external support for negotiations where possible.
VCs have negotiated countless more deals than you have.
You'll be entering the negotiations at a significant disadvantage.
Be very clear on what your non-negotiable terms are and get external support for negotiations where possible.
🔹 You're Not Unique
VCs receive hundreds of pitches per week.
That's a lot of noise to cut through.
A general pitch isn't enough to pique the interest of a high-quality VC.
Tailor your pitch to the specific criteria of each investor to stand out from the crowd.
VCs receive hundreds of pitches per week.
That's a lot of noise to cut through.
A general pitch isn't enough to pique the interest of a high-quality VC.
Tailor your pitch to the specific criteria of each investor to stand out from the crowd.
🔹 Terms Are Rarely Founder Friendly
The reality for most startups is that you need the VC more than they need you.
The more interest you can generate from multiple VCs,
The less likely you will end up being beholden to a single VC at sub-optimal terms.
The reality for most startups is that you need the VC more than they need you.
The more interest you can generate from multiple VCs,
The less likely you will end up being beholden to a single VC at sub-optimal terms.
🔹 Returns Comes First
VCs are focused on generating outsized returns for their fund.
The impact your startup will have on the world only matters if it has the potential to deliver those returns.
Give the investors confidence that your startup will outperform expectations.
VCs are focused on generating outsized returns for their fund.
The impact your startup will have on the world only matters if it has the potential to deliver those returns.
Give the investors confidence that your startup will outperform expectations.
🔹 You'll Need Help
You get a mechanic for your car.
You get a plumber to fix your pipes.
Why would you try and raise capital by yourself?
Stop trying to do it on your own and hire the right advisors to help you navigate the complexities of a raise.
You get a mechanic for your car.
You get a plumber to fix your pipes.
Why would you try and raise capital by yourself?
Stop trying to do it on your own and hire the right advisors to help you navigate the complexities of a raise.
TL;DR
7 harsh truths about raising money:
You'll Need Help
It's A Distraction
You're Outgunned
You're Not Unique
It's a Long Process
Returns Comes First
Terms Are Rarely Founder Friendly
7 harsh truths about raising money:
You'll Need Help
It's A Distraction
You're Outgunned
You're Not Unique
It's a Long Process
Returns Comes First
Terms Are Rarely Founder Friendly
That's a wrap!
If you enjoyed this thread:
1. Follow me @itsnivt to learn how to scale your business fast and get funded.
2. RT the tweet below to share this thread with your audience
If you enjoyed this thread:
1. Follow me @itsnivt to learn how to scale your business fast and get funded.
2. RT the tweet below to share this thread with your audience
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