The process can be seen from start to finish on the image below. Many entrepreneurs have found it can take as long as six to nine months to complete this process. In reality, it could take 90 days from initial pitch to money in the bank. In between rounds you’ll be updating current and prospective investors and nurturing them along as you cultivate your business to the point they consider you fundable against their criteria. What most don’t tell you is that even before you send out that first email to announce a raise or show off your pitch deck, you’ll need to be building relationships and asking for introductions. That is where your prospective investors are investigating all of the statements you’ve made and the real status of your business. Once you get to a Series A round and beyond you can be talking about months in the due diligence process alone. Execute final documents and get money wired in.
Start reaching out to potential investors with your ask.Gather your data on achievements and forecasting your financial needs.The Fundraising Process in Seven Simple Steps
However, you need to anticipate the length of time it will actually take from deciding you are raising to actually getting cash cleared in the bank. Once you get to a Series B or C round, you may be working more towards 15 to 20 months between bringing in new capital. Then you’ll be fundraising again, and asking for larger sums.
So, you may start out by getting enough money from friends and family to get set up, do more research, put together your prototype, and survive a year. In later and larger rounds this timeframe often grows a little. On average this happens around every 12 to 18 months. The next level up where you can prove your worth, and attract new investors. You are typically raising just enough money to get you to the next milestone. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M ( see it here) Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel ( see it here ) that I recently covered. The entrepreneurs that I find to be the best ones at fundraising are those that are able to master the art of storytelling with a pitch deck that has no more than 15 slides. In reality startups are raising money every year.
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