Startup Founders & CEOs Open Up About Fundraising in Challenging Times
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In five separate interviews last week, startup founders and CEOs shared their insights on fundraising in today’s challenging financing market.
Participants in these interviews included a 30-something who is a multi-time founder and CEO leading of an AI-centric B2B business; a first-time founder and CEO managing a healthcare technology company; a seasoned founder and CEO helming a real estate software, cloud, and mobile technology firm; a 30-something doctorate-holding first-time founder and CEO who is leading an AI company, and a multi-time founder and who is an experienced fintech professional. Angels plus small and large VC were their primary funding targets.
They highlight the importance of relationship building, crafting a compelling narrative, targeting relevant investors, building and showcasing a strong team, leveraging existing relationships, adapting the pitch, highlighting traction and scaling plans, accepting rejection with grace, maintaining perspective, contingency planning, projecting confidence, adding an independent board member, and storytelling.
They also emphasize the importance of understanding investor priorities and using operational tools to streamline fundraising. Despite the tricky circumstances, these entrepreneurs offer valuable perspectives for founders undertaking fundraising in any market.
Here are the main points in bullet form from these interviews:
Relationship building before fundraising is critical
Craft a compelling visionary narrative for your startup
Target investors relevant to your specialty area
Build out a strong team and set of advisors rather than try to fundraise on your own
Existing investor relationships are essential for fundraising in difficult markets
Adapt your pitch to investor expectations but don't abandon the core business model
Highlight current traction and future scaling plans
Accept rejection with grace – it’s part of the game
Maintain perspective despite challenges, focus on long-term
Surprises like unexpected term sheets require contingency planning
Project confidence even when facing obstacles
Add an Independent board member before your first major round (big seed) to help manage tricky dynamics in later stage financing
Persistence, storytelling, and understanding the investor’s real priorities are key
Don't overlook operational tools to streamline fundraising (e.g., AirTable, CARTA, etc.)
With preparation and showcasing progress, raising a round is possible even in down markets
While the financing and current economic climate may pose challenges for startups seeking funding, the insights shared by these experienced founders and CEOs demonstrate that it is still possible to raise capital with persistence and preparation. Fundraising is never easy, but it's incredibly challenging in a down market. However, by following the advice of these founders and CEOs, you can increase your chances of success and raise the capital you need to grow your startup.