Creating your fundraising plan


It's easy to get caught up in the success stories, but the truth is, fundraising for a startup is hard work, and it can take a while. In this article, you’ll learn what to plan for and what steps you need to take before you even create your pitch deck.
So you’ve decided to raise venture capital for your startup. Congratulations! While there are many options for funding your company, here are huge benefits to partnering with investors — and you’ll learn so much along the way.

Before you start pitching VCs, however, there are a few things you need to plan for. 

In this article, you’ll learn the steps you need to take and the things you should think about before you even create your pitch deck.

Plan to take some time

There are a lot of things that go into fundraising, so as a rule of thumb, overestimate both the amount of time and energy you think you’ll need.

Also, make sure you have enough money in the bank, in projected sales, or coming through other income sources (i.e., your day job) to tide over your business between now and when you get your first round of investment. 

Mapping your fundraising plan: Preparing before the pitch

Let’s start with the pre-work for the pre-work. Before you even start the fundraising process, there are things you can do so that you’re not sitting around waiting for money to start flowing or grow your business.

Account for time of year and current market trends

Timing isn’t everything, but it can count for a lot when it comes to fundraising. 

Investors are well-acquainted with market trends and are constantly looking at data to inform their decisions. While you don’t have control over market trends, it’s still important for you to be aware of the current trends, because they’ll influence how and when you pitch investors.

For example, you may find it more challenging to generate interest from venture capitalists for a crypto-related startup when market sentiment is negative. If that’s the case, it doesn’t mean that you should stop building. It just means that you should be very conscious of not only when you pitch but also how you pitch — perhaps spending more time on addressing market trends in your pitch than you might otherwise.

Build your narrative 

Before you put together an actual pitch deck, you’ll need to start thinking about and crafting your overall company narrative and communication strategy. This informs every other step in the pitching process, from getting the intro to a VC to determining the key data to present in your startup pitch. 

Think of this as setting the stage and learning how to tell your startup story to get people to care. After all, VCs are people.

Your narrative should include:

·       Your origin story.
·       Your startup’s mission and vision.
·       The target market for your solution.
·       What problem you’re solving and why it’s important.
·       How your product uniquely solves that problem.

Gather/organize data and financials

Next, you should start to gather and organize your data and company finances. This information is critical to support your startup pitch and key messages. 

At the very least, gather the following information and organize it for easy reference during pitching and in the data room:

  • Company data
o   Customer information
o   Metrics and analysis around product usage, cohort performance, etc.
o   A list of professional references that can speak to your performance as a founder
o   A list of customers who would act as references for your company

  • Accurate financial information to date:
o   Operating budget 
o   Revenue and expense forecast
o   Company runway

Once you’re pitching, VCs may ask you for other information as well — but this list should cover most bases.

And remember: The more organized you are in your finances, the faster and smoother the due diligence process during fundraising will go. Don’t skimp on the financial details.

Find investors 

Pro tip: Start the process of finding investors before you actually create your pitch deck. 

Why? Because fundraising takes time. It may take you a while to build a sizable enough list of investors to pitch to — and there will be time between when you have a list of investors to pitch to and when you’re ready to actually pitch to them. And, in the process of finding investors, you may also learn something that will impact your presentation and pitch deck.

Take it from us, it’s good to take some time building a list of investors to pitch to, and be mindful about who you choose. While some founders may employ the “spray and pray” method, it's better to conduct due diligence up front and identify investors and firms that are aligned with your company and goals. 

For example, pitching your seed stage startup to a firm that only focuses on Series B and up is probably a waste of your time and theirs. Pitching your fintech idea to a firm that specializes in AI and machine learning is similarly ill-advised. 

Narrow your focus

It can be useful to organize your list of investors as you build it:
  1. Practice partners: These are investors who can help you test and refine your pitch. They should be low-risk (existing investors, known advisors, or investors who may not be focused on your stage or business sector) folks who can provide high-quality feedback.
  2. Ideal investors: This is your main round. These are the investors you are most wanting to partner with.
  3. Strong contenders: Finally, you have your volleys; investors who may not fit into the second category but who you’d love to partner with. 
Consider these investor criteria as you start to research investors and categorize them:


·       Are they someone you’d want as a long-term partner? Remember, early stage investors can be involved for nearly a decade.
·       Do they get what you are trying to do?
·       Do they have the product chops that will help you improve?
·       More broadly, will they help make you more excellent?
·       What does their team bring to the table? No single VC has it all. What does the whole firm look like?
·       Do they have other assets or resources that can help address your specific business needs?
·       What are their customer networks like?
·       What support can they offer with recruiting? Marketing? Financials?

Use these questions to evaluate your pool of potential investors and organize them into the categories described above.

Where to find investors

Now you know how to organize your list, and what criteria to consider. But how do you actually find investors to add to your list?

  1. Research venture capital firms and accelerators that have invested in startups similar to yours.
  2. Leverage your network. Ask fellow startup founders which investors they’ve had success with or heard good things about.
  3. Join online communities of startup founders and keep your ear to the ground for investors with good reputations.
Finally, finding an “in” — that is, a mutual connection who could potentially give you a warm introduction — is always better than sending a cold email. Work your network! Which leads us to …

Building your fundraising funnel

The last thing to do before you create your pitch deck is to start building your fundraising funnel — which just means getting your foot in the door to actually have those pitch meetings. 

What this looks like in practice:

·       Cold outreach (email or phone call) to an individual
·       Warm outreach to people who already know you (or at least know OF you)
·       Tapping your personal or professional network for referrals
·       Attending startup networking events

It should go without saying, but warm outreach is always better than cold. Try to get as many warm intros as you can before you start your outreach. If you don’t know someone who can give you a warm introduction to a VC you’d like to pitch to, see if you can get an intro from another founder the firm has backed, another investor, or a mutual acquaintance. 

You’re pitch-perfectly ready for what comes next

You made it! You’re now ready to build your pitch deck (which we’ll detail in the next article). And then — the moment(s) of truth — you’ll make your pitch.

To recap this article, you should now know how to:
  • Plan to take your time getting ready for fundraising.
  • Map your fundraising plan before you pitch — including understanding the current market, building your narrative, gathering your data and building your list of investors.
  • Build your fundraising funnel, and opt for warm intros when you can.
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