Fundraising is an art, not science

Capital is chased by most startups, in any shape and from whatever source can be found.   Necessity and innovation combined with the opportunistic nature of entrepreneurs gives way to the perfect vision of funding an idea.  The reality of raising capital is harsh, from months of meetings and pitches to the emotional toll and roller coaster ride that it takes, fundraising is an art not a science.  

Most companies that think they need venture capital are not a fit for it.  Truly the best way to start a company is through boot strapping and re-investing free cash flow into growth.  Enticing investors is more akin to dating than transacting business and requires a deep level of focus combined with a surgical understanding of how your business is going to grow.  This is accomplished through a curated narrative about who you are as a team, how you plan to win customers and retain them as well as how you are going to make the financial side of the business work.

This narrative is often muddled by unrealistic expectations about going to market, unit economics and the amount of people required to execute it.  Our advice is to always plan for growth taking twice as long as you think with half the revenue you forecast.  Creating a narrative takes time, often bringing in  outside advice and perspective.  What is required is a very harsh internal discovery process about who you are, what you do and, most importantly, why you do it.  

michael tsokur