Why Most Founders Start Fundraising 90 Days Too Late

Hey everyone, this is Ryan Bryden from Breakout Capital Group.

Today’s newsletter post is going to be around fundraising timelines and how to best prepare for them.

The most common objection I get on intro calls with founders is around the timeline of when they want to start fundraising.

“We’re looking to start fundraising next month because we want to get xyz ready first.”

Usually, what they mean is that they want to start speaking with investors next month.

But those are two very different things.

Before a raise is ready to go to market, there is a lot of work that needs to happen behind the scenes:

• The positioning needs to be clear.

• The materials need to tell the right story.

• The investor targets need to be mapped.

• The outreach strategy needs to be built.

• The data room needs to be organized.

• And the founder needs to be prepared for the questions that will come once conversations begin.

This is why I believe most founders start fundraising ~90 days too late.

They wait until capital becomes an immediate need before beginning the process.

By that point, every conversation feels urgent. There is less time to test the story. Less room to learn from early investor feedback. And less leverage when investors know the company needs to close the round quickly.

Something that I don’t think is accounted for enough in the raising process is that your story is going to get beat up. You’re going to be told no, why xyz doesn’t work, and why people don’t align with your vision.

This feedback leads to changes and tweaks you need to make that eventually turn your company into a fundable story.

• Why this market?

• Why now?

• Why this team?

• What has been proven?

• What still needs to be proven?

• And how does this become a meaningful outcome?

You want enough of the right conversations happening within a concentrated window so that interest can build around the same time.

That requires preparation before the first email is ever sent.

The best time to begin fundraising is when you still have the ability to be patient.

That doesn’t mean you need to actively pitch investors six months before a raise.

It means the story, materials, targets and process should be taking shape well before the capital becomes urgent.

90 days out, build the foundation.

60 days out, refine the story and map the market.

30 days out, prepare the outreach.

Then, when the raise officially launches, you are actually ready to run a process.

I’m making this post because I see a lot of founders raising seed / A rounds that drift far past their target date.

I saw data today from Crunchbase that the average Seed round this year takes ~178 days.

From what we’re seeing and hearing, most of you need to start preparing earlier, and getting your deal in the market earlier to allow the time for feedback and iteration to run it’s course on your deal.

As always, thank you for reading. This is simply just an opinion-based piece based on anecdotal evidence we see everyday.

Ryan Bryden
Breakout Capital Group

If you’re looking to raise $2-100M before EOY and want full stack help on your materials, outreach, and getting your deal funded, check our Capital Advisory out.

If you’re looking to expand your go-to-market outside of your network and add 6-7 figures in revenue before making a sales hire, check our Revenue Advisory out.