Believing in myths about how and when to fundraise could leave you and your startup vulnerable. In my own experience of working with founders, there are some of the common misconceptions that most people have about VC fundraising.
Myth 6: Fundraising is something you do every 24 months.
Truth: The simple truth is you should never stop fundraising. Even when not actively engaged in the process you are always meeting people, networking and likely courting potential investors.
Myth 7: You only need to fundraise when you have less than 6 months of cash left.
Truth: The formal fundraising process at later stages takes longer than you think. Usually between 3 and 4 months from end to end. If you wait until you have less than 6 months of cash left then you risk your startup running out of cash. Start your formal fundraising once you have less than 12 months of cash remaining.
Myth 8: Fundraising is not seasonal, and you can get funding at any time.
Truth: Life is seasonal, and VC fundraising is the same. Data suggests that most deals are completed in July/August and November/December. This suggests 2 periods of strong funding each year commencing in May and September. However, it is still possible to secure fundraising outside of these periods.
Myth 9: Fundraising can be done on the side of the full-time CEO.
Truth: Fundraising is an almost full-time role. This is when having co-founders is useful as one of you can focus on fundraising while the other focuses on the business. If you don’t have a co-founder, then you will need to prioritise your responsibilities and where possible delegate out as many tasks as possible.
Myth 10: Fundraising is about managing a predictable process.
Truth: Fundraising is about adaptation. Learning to survive and thrive in an ambiguous and unpredictable situation. Outline your fundraising process week by week but expect from the beginning that you will be wrong.
If you want to survive the process and successfully secure fundraising, then replace these myths in your mind with the truth.