Raising Capital Right Now is Hard

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As I prepare to go to NYC in November for the Benzinga Fintech Deal Day & Awards, I am thinking about the current investment environment and the panel I will be speaking on: “Insiders on Capital Raising and Scaling: Strategies, Tips, and Examples.”

Raising money right now is difficult. It’s not getting easier. We tell startups that they need to think about staying lean. Don’t expect to be able to raise another round of capital after your seed round. Be cautious about who you have on your cap table. Remember that not every company needs to be a unicorn to be a successful outcome. Building a company is a marathon, if you aren’t ready for a 10-year journey, you may want to rethink starting a company.

In most cases figure out how to get to profitability. We are not in a grow-at-all-costs environment. Find customers early and design the product with their feedback. Sales, Sales, Sales- that is what will keep the company moving in the right direction. Technical debt happens and it’s something that’s unavoidable- live with it and deal with it down the road.

Hiring is key. Hire great talent, and retain great talent. Know your team and make sure they know you. Don’t settle when it comes to building a team with the right culture and the right team members. Hire people smarter than yourself who fill gaps where you don’t have expertise.

Have a clean, concise, easy-to-understand deck. Practice your pitch. Have an answer to why your company is investable. Why is it VC investable? Make sure you understand the competitive landscape. Understand what other companies in the industry have raised. Where have they had successes or failures?

Have a vision of where the product will be in the next few years. What is the ultimate goal? Understand the goals of your investors. Are they the right fit or are they looking for a different type of company to invest in?

As I think about the upcoming event and the panel, I think of some of the successful companies we have invested in and what makes them stand out. I look forward to sharing examples and talking more broadly about the current investment environment and specifically the seed stage where our team at Social Leverage invests.

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