If you are a first time founder and have never raised capital before, this blog will give you an overview of the process and some useful tips to make it go more smoothly.

Fundraising is never easy.  It is a time consuming, sometimes frustrating process.  Preparation and planning goes a long way to getting a good result. Think of the major steps from start to finish and be mostly prepared for each aspect of it.  There are always unexpected things that pop up but having the large items squared away will help keep the financing on track to close.

1. Strategy & Readiness

Get realistic and on the same page with your stakeholders.  Evaluate the market conditions for the stage of capital you are looking for.  Co-founders should have the tough conversations early and not in the middle of the raise. 

• Define your fundraising goal (amount + why you need it)
• Determine your runway needs (typically 12–24 months)
• Identify target investors (angels, seed funds, VCs by stage/industry)
• Clarify your valuation expectations
• Decide on funding type (equity, SAFE, convertible note)
• Align co-founders on dilution, control and founder equity vesting
• Discuss what life will be like with outside investors (hint: it’s different.)

2. Legal & Compliance

Investors expect your legal foundation to be clean and complete. Gaps here can slow down or even derail a raise. Don’t be broken before you start.  Find great advisors to help you.  

• Is your company properly incorporated and in good standing? 
• Founder agreements in place (e.g. assignment of invention agreements)
• IP ownership secured (patents, trademarks, code)
• Employee contracts / advisor agreements
• Stock option plan (if applicable)
• Data room prepared (see below) Keep this up to date too.

3. Business Fundamentals

You should know your business inside and out. Investors will expect you to explain your fundamentals clearly and confidently, without relying on notes.

At a minimum, you should be able to articulate:

• A clear problem statement and how your solution addresses it
• Your target market, including TAM, SAM, and SOM
• A strong and differentiated value proposition
• Early signs of product-market fit, even if still developing
• Your competitive landscape and positioning
• Your revenue model or a clear path to monetization

This is the foundation of your story. The more clearly you can communicate it, the easier it is for investors to understand the opportunity and your ability to execute.

4. Financial Preparation

Know your numbers to the best you can at this point in time.  Do it for yourself so you’re not wasting time on a business that has no chance of financial success.  Show the investors you have the sophistication to manage their investment funds properly.  

Startups typically raise capital in rounds where the funds raised enable the company to increase its value so the next round can be raised without over dilution.  Good financial projections and financial management keep you on track to avoid down rounds or worse. 

• 3–5 year financial projections
• Detailed use of funds
• Current financial statements (if operating)
• Unit economics (CAC, LTV, margins)
• Burn rate and runway calculation
• Cap table (clean and up-to-date)

5. Pitch Materials

Your pitch materials are designed to move investors to the next step. A strong pitch deck should be clear, concise, and easy to follow. These are marketing tools that get you to the next step in the process. There are many great pitch deck examples available but be concise, practice your presentation and get lots of feedback.

• Investor pitch deck (10–15 slides)
  • Problem
  • Solution
  • Market opportunity
  • Product/demo
  • Business model
  • Traction
  • Go-to-market strategy
  • Competition
  • Team
  • Financials
  • Ask
• One-liner / elevator pitch
• Executive summary (optional but useful)
• Product demo or prototype

6. Data Room Setup

Having this ready and professionally prepared indicates you have your act together and will shorten the due diligence process.

Prepare a shared folder (Google Drive, Dropbox, etc.) with:

• Pitch deck
• Financials & projections
• Cap table
• Legal documents
• Product documentation
• Customer/traction data
• Key contracts (partners, clients)

7. Traction & Proof Points

Traction is one of the strongest ways to build investor confidence. These are significant de-risking points.  They support valuations, show management’s ability to execute and can be the difference maker.  There is a huge difference between “nice idea” to “Wow, nicely done!” 

• MVP or working product
• Early users or customers
• Revenue (if applicable)
• Growth metrics (MoM/YoY)
• Testimonials or case studies
• Key partnerships

8. Outreach Preparation

Fundraising is also a sales process. Preparation here can make a big difference.

Build a targeted investor list and prioritize warm introductions. Prepare outreach messages and track conversations so you stay organized. Use a CRM or tracker to manage conversations, follow-ups, and next steps. This helps you maintain momentum and avoid missed opportunities.

Your pitch should also be flexible, as different investors may focus on different aspects of your business.

9. Fundraising Process

Fundraising takes persistence. Not every conversation will lead to a deal, so be prepared for a mix of outcomes along the way.

Stay focused on execution by:

• Scheduling and managing investor meetings
• Practicing your pitch and refining delivery
• Handling questions with clarity and confidence
• Tracking investor interest and follow-ups
• Sending regular updates to engaged investors
• Creating urgency by batching meetings where possible

Consistency and organization are key. The more structured your process is, the easier it is to maintain momentum and move conversations forward.

10. Term Sheets & Negotiations

Once you get a term sheet there are usually a few terms to negotiate before the due diligence starts in ernest.  This is where experienced startup legal counsel is critical. 

Take time to fully understand what you’re being offered and how it impacts your business long term. Focus on:

• Understanding your term sheets (valuation, dilution, and control)
• Comparing multiple offers, if available
• Negotiating key terms such as board seats and liquidation preferences. 

Anything that affects control or the eventual payout at exit should be scrutinized. A strong term sheet is not just about valuation. It’s about setting the right structure for the next phase of growth.

11. Deep Due Diligence & Closing

At this stage, investors take a deeper look at everything you’ve presented. Much of it may have already been discussed, but expect more detailed validation across key areas of the business.

This phase is largely legal and financial, and your earlier preparation will make a big difference. Investors will typically review:

• Market size and opportunity
• Customer acquisition strategy
• Financial assumptions and projections
• Legal structure and documentation
• Team background and references
• Product or technology in more detail

If your data room is organized and your information is consistent, this process should move more efficiently. From there, the focus shifts to finalizing agreements and completing the transaction.

Once everything is signed and funds are received, the round officially closes.

Congratulations on raising a round. Now go execute!