Essential fundraising advice. The financial planning and runway focus here naturally leads to a critical next question: how do you build the operational finance systems to deploy that capital effectively? TCLM digs into the trade credit, working capital, and payment workflows that keep a funded company financially resilient. Worth a look pre- or post-raise.
Interesting post but I think it has a bit of a survivor bias: quite some startups I have met tried to call many investors in short amount of time to get the FOMO but end up just aligning "No" one after each others. I think a crucial piece is that it's very hard to create this FOMO feeling and most startup who end up raising didn't get this pull from investors. I would be curious to hear more about creating this FOMO feeling: not from a timing perspective, but more from a content/behavior/traction perspective
It is hard to create FOMO and yes many startups do not raise, unfortunately.
Our advice is plan and concentrate your meetings. This creates the 'feelings' of FOMO, even if those meetings are "no's" - with a packed schedule you (a) are harder to schedule with (b) slower and less responsive on email (c) less reliant on each meeting being successful, which gives you confidence (d) you create chatter in the market, etc.
Each of these smalls thing compound to (hopefully) gives investors FOMO. Or at the least, compound to give the founder and abundance of options.
Outside of the social theatre (above) I am not sure you can create FOMO in isolation - i.e. through a great deck or great numbers talking to a single investor. You can certainly raise on those merits.
But FOMO (and talking to a lot of folks) will increase the odds.
You make a good point about the chatter indeed. Investors talk to each other and hearing your name again and again can create this FOMO.
What I had in mind was something like having a good traction surge in a very niche environment (vs slow and steady traction): this was, to me, the common denominator to startup who raised money. But that's maybe a different topic.
Great insights on the seed round process! For founders who might feel uneasy about giving up control or significant equity to venture capitalists, regulated investment crowdfunding could be a compelling alternative. It allows founders to raise capital from a broad base of supporters while maintaining more ownership and decision-making power. Plus, it can foster a deeper connection with the community, which can be invaluable in the long run!
Great info, well-structured and informative post. Are there particular missteps during fundraising that you think founders should avoid and if so, what do you think they should do instead?
As a founder starting a seed raise, this is incredibly timed and insightful. Thank you, Lenny!
Amazing timing and great advice!
The timing of this post is so right for me. Appreciate you Lenny for sourcing such a high-value advice.
Essential fundraising advice. The financial planning and runway focus here naturally leads to a critical next question: how do you build the operational finance systems to deploy that capital effectively? TCLM digs into the trade credit, working capital, and payment workflows that keep a funded company financially resilient. Worth a look pre- or post-raise.
(It’s free)- https://tradecredit.substack.com/
This is one of the best fundraising guides I've seen, thank you! Extremely relevant
Interesting post but I think it has a bit of a survivor bias: quite some startups I have met tried to call many investors in short amount of time to get the FOMO but end up just aligning "No" one after each others. I think a crucial piece is that it's very hard to create this FOMO feeling and most startup who end up raising didn't get this pull from investors. I would be curious to hear more about creating this FOMO feeling: not from a timing perspective, but more from a content/behavior/traction perspective
It is hard to create FOMO and yes many startups do not raise, unfortunately.
Our advice is plan and concentrate your meetings. This creates the 'feelings' of FOMO, even if those meetings are "no's" - with a packed schedule you (a) are harder to schedule with (b) slower and less responsive on email (c) less reliant on each meeting being successful, which gives you confidence (d) you create chatter in the market, etc.
Each of these smalls thing compound to (hopefully) gives investors FOMO. Or at the least, compound to give the founder and abundance of options.
Outside of the social theatre (above) I am not sure you can create FOMO in isolation - i.e. through a great deck or great numbers talking to a single investor. You can certainly raise on those merits.
But FOMO (and talking to a lot of folks) will increase the odds.
You make a good point about the chatter indeed. Investors talk to each other and hearing your name again and again can create this FOMO.
What I had in mind was something like having a good traction surge in a very niche environment (vs slow and steady traction): this was, to me, the common denominator to startup who raised money. But that's maybe a different topic.
Great insights on the seed round process! For founders who might feel uneasy about giving up control or significant equity to venture capitalists, regulated investment crowdfunding could be a compelling alternative. It allows founders to raise capital from a broad base of supporters while maintaining more ownership and decision-making power. Plus, it can foster a deeper connection with the community, which can be invaluable in the long run!
Great info, well-structured and informative post. Are there particular missteps during fundraising that you think founders should avoid and if so, what do you think they should do instead?
The biggest and most common missteps are,
1. not talking to enough investors
2. not being humble in the face of a fundraise
3. overplaying your hands
To avoid, do the opposite of the above :)
Got it. Thanks for your reply!
This is a really excellent summary and with valuable basic insights that are often overlooked. Great content, as always Lenny!
Great post. Sharing with lots of founders. Very timely.
this was very helpful jack and lenny. ty for this.
was thinking of raising money for CalmEmail.xyz but had no clarity - this guide helped me a lot.
Really helpful! Thanks for making this post happen, Lenny.