1. Handling Inbound Investor Interest

You will likely get a great deal of inbound investor interest in-between your fundraises (after all, byFounders invested in you 😎). There are various ways to handle this. Generally, we recommend that you keep track of any inbound interest from investors and continuously log the name of the firm and details on the person reaching out. However, while inbound interest can be flattering it can also serve as a distraction when you’re in between fundraising cycles. As such, we recommend you to keep investor dialogue to a minimum when you’re not actively fundraising aside from maybe a handful of select investors specifically relevant for your next round that you are building relationship with.

<aside> 👉 Use our template: Investor & Fundraising Tracker: https://docs.google.com/spreadsheets/d/1ACbZklpt8H19u2HpbZgUc0VXd-tzmIK6hag86QfR2ME/edit#gid=0 (sheets version) Notion template here

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2. Handling Outbound Investor Interest

Cold outreaches to investors seldom work since it (sadly) has negative signalling. Hence, the best is for you to build up relationships over time that you can leverage when you start fundraising. The most optimal situation today is often when a VC try to pre-empt your next round (i.e., you’re receiving a TS when you’re not actively fundraising) and that triggers fomo amongst other investors. The next best option is that another founder or an investor back-channels to an investor about how amazing you are and that “you’re about to raise soon”.

<aside> 👉 Here’s some comprehensive VC lists for you:

Thank you @Henrik Jensen (Fuzey co-founder) for sharing these 🤗 </aside>

3. Knowing When to Fundraise

<aside> 🙅 Don’t raise money just because you’re running out of money!

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That you're running out of money is not the answer to why and when you should fundraise. On the contrary, the mere fact that your bank account is running dry can cause a sub-optimal fundraising outcome and can make the process extremely stressful for you.

Venture capital is particularly well-suited for building companies and launching products in stages, unlocking new pools of capital as you gradually progress and de-risk the opportunity.

Hence, you should fundraise when things are really starting to click, you’ve unlocked something, and/or the path to the next stage has become clearer — and you need the capital to get there fast. You can then command a higher valuation and dilute less. This can be with 3, 6, or 12 months of runway left.

Instead of thinking about round milestones as revenue metrics (as they always change and are subject to each startup and VC), its helpful to think of the fundraising rounds in more general terms: