Founders who raise well start about a year before their cash runs out, prepare the data room months ahead and know their numbers in detail. They raise what the next milestone needs, settle sensitive terms before term sheets arrive and give the round their full focus. These fundraising tips for founders come from real rounds and experienced VC fund managers.
What are the best fundraising tips for founders?
They prepare earlier, know their numbers better and run the round with more discipline. The tips in this guide come from three cases that I described in my CEO Briefing:
- An oversubscribed €8 million round: a founder who had just closed it walked through the round in one of my weekly group calls with founders. Oversubscribed means investors wanted to invest more money than the round had room for.
- How VC funds raise money: Philipp Möhring is General Partner at Tiny, the most active early-stage VC in Europe. A general partner is one of the people who run a venture capital fund. Before raising his fourth fund, Philipp asked ten to twelve successful fund managers how they close their funds in only a couple of weeks.
- Parloa: Malte Kosub, CEO and co-founder of the German AI company Parloa, which has raised over $560 million, explained how his rounds got faster over time.
When should founders start preparing a round?
About a year before your cash runs out. That is Philipp Möhring's rule. One fund manager he asked had closed his fund in six weeks. His answer to how: "Six weeks? A lot happens before that."
A fast close is usually the end of a long process. In the CEO Briefing on what the best fundraisers do differently, I see the same pattern in founder rounds. Founders who close quickly kept investor conversations warm between rounds. Founders who start three months before their cash runs out often end up with one term sheet and no negotiating power.
- Talk to many investors: "The best fundraisers simply talk to the most people," says Philipp.
- Watch the calendar: February, May and October are good months to start a process.
- Start the data room early: in the €8 million round, the data room was started months in advance and improved continuously. A data room is the online folder with all documents investors check before they invest.
How should you prepare the pitch and your numbers?
Build the story first, test it, then design it. And know your numbers well enough to explain why they move. In the CEO Briefing on the oversubscribed €8 million round, preparation was the number one success factor:
- Story before design: the pitch began as a rough draft focused only on logic and flow. It went to a design agency only after the story held up in discussions. A fixed-price agreement with the agency avoided friction during the rounds of changes.
- Stress-tested pitch: the pitch was challenged, rehearsed and tested again and again, including in direct work with me.
- Hard questions answered early: the team collected critical questions and answered them before investors asked.
- KPI mastery: the founder knew his KPIs (key performance indicators, the core numbers of the business) in detail and understood what caused them. When analysts asked weak questions after reading the data room, he explained causes instead of defending results.
The founder entered every conversation calm and clear. Investors mentioned this, even the ones who passed.
How much money should you raise?
Raise the amount your next milestone requires. The €8 million company had a seven-digit annual recurring revenue (ARR) and could have raised more. The founders chose not to.
They calculated the round size backward from the next strategic milestone: the revenue level at which growth-stage investors come in. The goal was to keep room for a higher valuation in the next round instead of taking in as much capital as possible. They had also set limits for dilution and ownership in advance. Dilution is the share of the company the founders give up in a round.
When the round was oversubscribed, these limits forced real choices. Several existing angel investors wanted to use their pro-rata rights, which allow them to invest again to keep their ownership share. Some of these allocations could not be accommodated, even where relationships were strong.
Which terms should you settle before term sheets arrive?
The terms that are risky to discover late. A term sheet is the first written offer of an investor, and negotiations start there. Some topics carry a much higher risk if they only come up after term sheets are issued. The €8 million founder brought up three of them before any term sheet was issued:
- Good and bad leaver definitions: what happens to a founder's shares if the founder leaves the company.
- Control rights: who can decide what in the company.
- Majority and veto structures: which votes are needed for decisions and who can block them.
He shared his view on each point and asked investors to confirm it. That way, the term sheets that came in already reflected the structure he wanted. Some investors agreed at once. Others wanted to discuss these points later. That difference alone showed him which investors fit.
The first term sheet then came with a short deadline. The founder said openly that other talks were running, that decisions needed internal alignment and that reference calls and checks were part of the process. That gave him time without a conflict.
How do you stay in control while the round is running?
Give the round your full attention and stay disciplined about where you spend it. During the core phase, the €8 million founder spent nearly all his time on fundraising. Others supported operations during that period, and fundraising became his main role.
- Walk in assuming you will close: Philipp says you need to be "a little arrogant". A founder who assumes the round will close negotiates from a different position than one who hopes the investor will like him. A company worth investing in is still the basis.
- Stop chasing silent investors: "If you fail slowly in a fundraise, you keep moving onto your back foot," says Philipp. Spend the time on investors who still reply.
- Count only real offers: an investor who says he might pre-empt, which means invest before the round is open to others, has not made an offer. Keep every conversation running until a term sheet is signed.
- Order your meetings: pitch your top five investors after you have sharpened your answers with others. This advice comes from the CEO Briefing on Parloa's fundraising, where Malte Kosub showed that the process is at least as important as the pitch. The guide to the startup fundraising process covers his approach in detail.
“Strong preparation reduces uncertainty. Reduced uncertainty increases trust.”
Frequently asked questions
How early should founders start fundraising?
Philipp Möhring of Tiny advises thinking about the raise about a year before your cash runs out. February, May and October are good months to start a process.
Should I raise as much money as investors offer?
Not automatically. The founders of an oversubscribed €8 million round calculated the amount backward from their next milestone and kept room for a higher valuation later.
When should I discuss leaver terms and veto rights?
Before term sheets arrive. Topics like leaver definitions, control rights and veto structures carry more risk if they only come up after a term sheet is issued.
How should I handle a term sheet with a short deadline?
Be open about your process: say that other talks are running and that reference calls and checks are still part of it. Clear scheduling creates time without a conflict.
Do I need a fundraising advisor?
Not for every round. The founder of the €8 million round rehearsed and stress-tested his pitch in direct work with me before investors saw it. That kind of work is the core of fundraising advisory.
