Raising venture capital requires understanding the current landscape. The median pre-seed round now sits around $750K-$1.5M, and seed rounds range from $2M-$5M. Understanding these dynamics is essential before you start the process.
When to Raise: Timing Is Everything
The ideal time to raise is when you have momentum but do not desperately need the money. This means you should start fundraising when you have at least 6 months of runway remaining, evidence of product-market fit (or strong signals), and a clear narrative about what the capital will unlock.
Never raise from a position of desperation. Investors can sense it, and it destroys your negotiating leverage.
Building Your Investor Pipeline
Treat fundraising like enterprise sales. You need a pipeline of 60-100 potential investors, segmented into tiers. Tier 1 is your dream list: 10-15 funds that are a perfect fit. Tier 2 is your solid list: 20-30 funds in your space. Tier 3 is your broad list: everyone else who is relevant.
Work your pipeline in reverse. Start with Tier 3 to practice your pitch and gather feedback. Approach Tier 1 only when you are razor-sharp.
The Pitch Deck That Wins
Your pitch deck should be 12-15 slides maximum: Cover, Problem, Solution, Traction, Market, Business Model, Product, Team, Competition, Go-to-Market, Financials, Ask. The single most important slide is Traction. Investors expect to see real usage data at the seed stage.
SAFE Notes vs. Priced Rounds
At pre-seed, most rounds use SAFEs. They are faster, cheaper, and founder-friendlier. At seed, the market is split. If raising over $2M, a priced round may actually be better for clarity. Budget $15-25K for legal fees on a priced seed round.
Negotiating Terms That Matter
Valuation gets all the attention, but it is not the most important term. Focus on: Liquidation preference (1x non-participating), Board composition (maintain founder control at seed), Pro-rata rights, and Anti-dilution provisions (broad-based weighted average is founder-friendly). Never accept full ratchet anti-dilution.
The Fundraising Timeline
Plan for 3-4 months from first meeting to money in the bank. Month 1: warm-up, Month 2: deep dives, Month 3: term sheets and closing. Add a buffer month because things always take longer than expected.
