Are You Fundraising At the Wrong Time?

For virtually every startup, fundraising is inevitable. However, too many founders treat it as something they want to do rather than something they need. Other founders look at fundraising as a marker for success - and sometimes as the only marker that matters.

As a result, some startup founders end up seeking fundraising at all times. In addition to not always being the best use of time, many founders end up confused as to why their fundraising efforts aren’t successful. More times than not, fundraising efforts aren’t successful because founders are trying to fundraise at the wrong time.

Successful fundraising often comes down to timing. If your startup is currently at the flat part of the S curve, there is no reason for investors to jump aboard. At this point, your startup isn’t showing any growth, just potential. That’s going to be a hard sell, even in a friendly fundraising climate.

Instead, startups need to get themselves to the steep part of the S curve before they start to fundraise. At that point, investors will be able to see the growth and project where the company can go. They will see the lofty ambitions that founders often have and recognize that getting to that point is possible. In fact, investors will see the urgency in investing in a startup right now rather than needing to be sold on why this is the right investment for them.

When it comes to fundraising, founders need to stay focused on the S curve. It’s all about finding the next S curve that’s available. When you’ve found the next S curve and reach the steep part of it, the time to fundraise has arrived. After each successful round, just think about getting to the next S curve and reaching the steep part to begin the fundraising process all over again.

If you find yourself struggling to fundraise, there is a good chance you’re doing it at the wrong time. You might also be doing it for the wrong reasons. The time to strike is when you’ve reached the steep point of the S curve. If you can get the timing right, you’ll be amazed at how fundraising becomes much easier.