Founders: Two Pieces of Advice for Capital Raising

What advice or specific tricks of the trade do you have, for founders, going through the process of raising capital, in terms of preparation, processes or any materials that you think makes the process as professional as possible?

One is, raise the capital when you need it the least. Rather than waiting until the last minute, when you are running out of cash or balance sheet becomes weak, it’s always important to start the process earlier, when you are in a situation of strength. Even if you don’t need capital, I think it’s always good to have an extra amount of capital, when your business is strong.

Then second thing is, it’s always helpful to get help from any of the advisors, whether those are consultants, painting the story to tell to the investors or bankers, helping you to find the right investor set. I think, although it takes some capital, it will help the process run much more smoothly and it will help you find the right capital, from the right investors. It’s very time consuming, so having the right partner with you, to run that process, is very important. As a CEO, when you are fund-raising, you also need to run your business. Having the right set of partners, who are 100% focused on raising the capital, is very important.

That will help you with the preparation of pulling the right data, creating a much more advanced story. Yes, you want to continue to build a relationship, but having the right story, having the right data set, which is consistent communication or consistent story, is important. Those are a few things that I would suggest, for any of the founders.