When Should You Actually Start Your Raise?

One of the things I’ve been hearing a lot of recently from founders I’m speaking with everyday has been around the timeline of when they should raise their round.

“We want to develop product more first!”
“We need these pilot projects to turn into closed deals!”
“Our financials aren’t fully ready to speak to investors yet!”

A lot of the time, these objections are just coping for the fear of getting started.

“Fundraising” can be a pretty fluid process. Meaning, just because you have a few conversations with investors, doesn’t mean you can’t continue working on the product.

Or building your sales pipeline.

Or getting your data room ready.

All of these things SHOULD continue to be happening while the raise is going on.

I’ve been telling founders this a lot lately, but starting to have conversations with investors does one major thing that is helpful for your company.

It gives you real market feedback.

A lot of the time for teams building (especially in the technology space), founders turn on the blinders trying to make their platform / app / software perfect.

They neglect what the market thinks, or what their customers think, or what investors think.

When you’re having conversations along the way WHILE you’re building and fine-tuning the product, you get data that you can put back into what you’re doing to make better.

This spirals into a positive feedback loop:

Speak with relevant investors —> get data / feedback about your product —> make changes to make the product better —> improved customer experience / retention / adoption —> better growth metrics —> more conversations with relevant investors —> repeat

Is this much easier said than done?

Of course.

But the core idea still applies.

If you need outside capital to grow, you need to be having conversations and hearing from these sources earlier than you think.

Neglecting this results in wasted time “building” and “refining” something that may have never needed it in the first place, wasted resources / burn on taking too long to make a decision, and misalignment with your market and those investing in it.

Thanks for reading as always,

Ryan Bryden
Breakout Capital Group

As always:

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