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Funding Landscape


Nothing but the truth

Most founders of scaleups have a very romanticised view of what it's like to get funding.

You find a Venture Capital company you like the look of and email them your pitch. You meet, sparks fly, and suddenly, they're begging you to take their money. The end.

Unfortunately, it's never that simple. The fundraising journey is complicated, and no two founders have the same experience.

Some scaleups sail flawlessly from Seed to Series A to Series B and C funding. Others get their seed funding easily enough from angel investors but struggle to appeal to VCs. Some skip the pre-A funding only to find they've not raised enough and have to go back around again.

Sounds frustrating? Welcome to the world of VC fundraising.

In this next set of PlayBooks, I'll talk you through the funding experience including how to kickstart your fundraising campaign, follow up on your pitch and negotiate a deal.


Who are these PlayBooks for?

In these PlayBooks, I'll focus on VC fundraising – typically your Series A/B/C+ funding. In a nutshell, anything between $3 to $300 million, I'm your guy.

Very early-stage investment (your Pre-Seed and Seed), as well as your late-stage fundraising, require different strategies. While some of the tactics in the upcoming articles are still relevant, there are other factors at play you need to be mindful of.

Different stages have different priorities, and this table explains it best. I'll grab a coffee while you look at it.


Fundraising myths and truths

If this is your first rodeo when it comes to Series A+ funding, you might be a little nervous about what's in store.

You might have already worked with an angel investor – so you know the process. However, if you bootstrapped the first phase of your business or relied on crowdfunding to get your money, the world of VC investment may seem like a strange and unusual beast.

As someone who has worked in scaleups and sat on their boards before (independently and as the VC investor), there's one key thing to remember. VCs are just like you. They put their trousers on one leg at a time, forget their online passwords and go to the bathroom. Sometimes twice or three times a day.

With this in mind, it's essential to know what the reality of VC investment is all about.

Let's dive in and take a look.


Myth 1: The VC's main focus is finding companies that will become unicorns

Truth: The VC's main focus is to eliminate startups that will not become big

As savvy as VCs are, reliably spotting unicorns is hard. The Beatles were rejected by about four different recording companies before they were signed up and… well, you know the rest.

It's a better (and safer) strategy to weed out the rubbish scaleups so they can keep an eye on the ones that may give them a return on their prospective investments.

What does this mean for you? You need to show your audience why it's not safe to eliminate you just yet. Hit that FOMO button as hard as you can and give them a reason to keep you in the running.

After all, no VC wants to be the one who said 'no' to the next big thing.


Myth 2: The main deliverable of fundraising is a pitch deck

Truth: The pitch, team and business case all play a part when it comes to fundraising

In early fundraising, a great pitch deck and plan may be enough to get you the money you need. However, other factors need to be considered later on in the process.

You need to showcase your mobilised team and how they will work to make your scaleup a success, as well as your case for investment. What rational reasons can you give for the VC to keep you onboard?

Don't take this as an excuse to slack off on your pitch deck – but I've written too many playbooks about that subject for that to happen!


Myth 3: It's easy to fundraise

Truth: It's not easy to fundraise

I've worked with many founders who think they will get the money within three weeks of getting started. If only it was that simple.

In my experience, Series A+ fundraising can take up to three months from kick-off to close, and that's working on the assumption that the investors are interested in you. If they're on the fence, they may (i.e. will) take further still.

Even if you get the nod, you have to wait for contracts to be negotiated, due diligence completed and for the cash to land in your account. Trust me, some VC companies (no names) are not great at paperwork!


Myth 4: Landing investment is easy; you just need a chance to pitch

Truth: Getting the opportunity to pitch to a VC is the easy part

You've just got an email from an investor, and they want to meet you. Hold off from popping the champagne just yet.

Getting a pitch is all part of the process. The VC wants to use the pitch presentation to a) see your pitch in action and b) see if you're someone they could work with.

Don't assume you're a shoo-in because you have the appointment in your diary. In my experience, these founders typically don't get a second meeting.


Myth 5: We had a great first pitch, so the offer is in the bag

Truth: A great first meeting is only the first step in a longer process

One hour-long meeting isn't enough to determine whether a business is worth investing millions of dollars in. Even if your VC loves you and thinks your company is awesome, they still want to do their due diligence.

After the first pitch, you can expect phone calls to understand your business better, a Q&A with the whole investment team and a session to negotiate terms.

I have included in the playbook a breakdown of how most investment processes go:


Myth 6: Fundraising is something you do every 24 months

Truth: You're constantly fundraising

Even when you're not actively raising a round, you're preparing for the next one.

You're positioning your company, metrics and team.

You're hunting out prospective investors.

You're looking for the best hires to help you achieve your vision.

You're networking for connections to help you get your foot in the door.

Welcome to the world of scaleups and investments!


Myth 7: You only need to actively fundraise when you have less than six months of cash left

Truth: You need to actively fundraise with 12 months of cash left

Nothing ever goes to plan in business.

You could be happily chugging along when your key supplier goes bust, your CMO gets poached by another company, or the VC you're working with suddenly withdraws their offer. 

This means you need to have contingencies in place.

The earlier you fundraise, the more prepared you will be for any eventuality. It also means you can choose the best investment deal, rather than go with a crap one because you're out of options.


Myth 8: Fundraising isn't seasonal

Truth: Fundraising is seasonal

Are you more likely to get a deal at certain times of the year? The stats show you are.

According to public deal data, August and December see more closed deals and more investment. VCs typically invest more as the year moves on, as they have quotas to fill. Don't tell anyone I told you this though, or I may have to kill you.

With this in mind, the best times to start the process are in September and May, to aim for a December or August close.

However, don't let the stats stop you from getting funding – you don't want to leave it too late. VC companies don't shut down over vacations, and you may have a better chance at getting attention when things are quieter – although the deal may move a little slower.


Myth 9: Fundraising is a part-time job

Truth: Fundraising is a full-time role

Fundraising will take a lot of your time, and it's important to delegate and prioritise it. I'm going to be brutally honest, if you're a solo founder or have a small, inefficient team… you're gonna struggle.

Don't just treat investment as an afterthought; consider it a guiding focus. Dedicate time to leading the fundraising charge or delegate responsibilities to your team.

The more you put in, the more you'll get out. Trust me on this one.


Myth 10: Fundraising is about managing a predictable process

Truth: Fundraising is about living with ambiguous outcomes

Fundraising isn't linear. Timelines change, priorities move around, and people change their minds. It's better to be flexible and manage your expectations.

If you've fundraised before, it's likely your experience this time around will be a very different one. Try and go with the flow but do try and build in regular fundraising management structures so you can keep on top of the process.


Myth 11: With this month's great results, it will be easy to raise

Truth: Investors care about repeatability

Imagine two companies need funding. Company A has massive profits in some months, but low spikes in others with no clear pattern. Company B is more dependable, with slow-growing profits.

Which business will VCs go for? Company B every single time (well unless there are other major factors at play). Steady progress and repeatability is more important as it shows the VC is more likely to get a return on their investment.


Myth 12: Series A is the hardest raise

Truth: Series B is the hardest raise

Many founders I've worked with are most worried about Series A funding. This makes sense as you're moving from being a small startup to a well-established scaleup. Goodbye friendly angel investor, hello serious VC sitting behind a marble table with some modernist glass art work in your reception.

However, Series B is a lot more of a challenge. Not only do you need to show you've got the right product-market fit, but that you can scale too.   And the investors are a bit bigger, tougher and uglier as well.

Raising at series B is like riding a unicycle while juggling chainsaws.


Myth 13: VCs have a really easy job

Truth: Being a VC isn't all that fun

A lot of founders have a pre-conceived opinion of VCs. They go to a few meetings each day, enjoy a big lunch on the company dime and clock off at 3pm to play a few rounds of golf or chug cocktails.

Nothing could be further than the truth. VCs are often pulled in different directions, have to answer emails and attend meetings when they're on vacation, as well as deal with mountains of paperwork.

Not only this, but they have to say 'no' to companies that need funding to survive. They might even like the entrepreneur personally and love what they are doing, just the numbers don’t work.  Saying ‘no’ is a tough gig.

What’s more, most VCs don’t make a gazillion dollars.  Capital markets just don’t work like that and so there is a regression to the median returns.  Which means many VCs have to answer to the pressure from their partners for rubbish investments and LPs for mediocre and slower returns.

The bottom-line, the easier and less painful you can make the fundraising process for VCs, the easier and less painful it will be for you.  That might be a quick pass, with helpful feedback, which isn’t what you want to ideally hear, but is most useful in the end.


Myth 14: Fundraising is mainly about logical decision making

Truth: Fundraising is a balance of logic, credibility and emotional buy-in

You may think that VCs are all about logic and statistics, and it's true that sensible reasoning plays a big part in the investment process. However, they also want to work with businesses that are personable and have influence.

If you want to know more about positioning and getting that all-important emotional buy-in, I have written playbooks on those topics.


Myth 15: It's a pitch thing first and a people thing second

Truth: It's a people thing first and a pitch thing second

In a previous playbook on pitch delivery, I talked about the 'airport test'. Would I want to be stuck on a plane with the person I'm investing in?

You could be the world's greatest entrepreneur, but if you're rude, irritable or lose your temper at the drop of a hat, have an inauthentic personality, are flakey or generally abrasive, you're not getting funded. This is especially true at Series A and B, where personalities play a huge part in the process.  Later on if your numbers are killing it, folks will turn a blind-eye (ish)... but your numbers REALLY need to be killing it!


Myth 16: I'm very unique, and my startup is a guaranteed unicorn!

Truth: Meh

Just because your parents said you were special doesn't mean a VC will think so.  They don’t hand out gold participation medals.

Unless you're a famous founder with a billion-dollar exit in your industry, you're just another entrepreneur that wants to hit the big time.

And if you are a famous founder with a billion-dollar exit… what are you reading this playbook for?!  Call me and you can hang out on my yacht in Monaco at the F1 with Jony Ive and Beyonce (yeah, i wish).

Be confident. Stay humble. And take that stick out of your ass.


In summary: know how to play the game

Fundraising is no walk in the park. You need to know your business, you need to know your data, and you need to know where you want to go.

I hope this playbook has shed light on the VC process and what you need to consider to improve your chances of successful funding.


What's next? How to run a (miltary-style) campaign

My next playbook will be about putting together a strategic fundraising campaign. How do you prepare, how do you manage the process, and what do you do when your fundraising plans go off-piste?

An introduction to the VC investment landscape and the 15 big myths about start-up venture fundraising. From Jonathan Bullock, ex Google Chief of staff & SoftBank COO

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