Why it can take at least six months to raise money for your startup

How much time and effort is required to raise money from outside investors for your early startup?

It can take most of the founder’s time for six months to a year if your startup has these characteristics:

  • Product not built yet or it’s not close to being sellable
  • No paying customer or revenues yet
  • No happy customers using your product yet
  • No believable plan for how you will efficiently get to $1M in revenue with happy customers
  • Inexperienced founder who doesn’t speak fluently about SaaS, pitching, building products, selling, and marketing
  • An “everything to everybody” product and growth strategy
  • No clear passion for the product or the market
  • Not capable of building a serious team
  • No experienced advisors who know your market and startup stage deeply
  • You’re outside Silicon Valley and are a first-time founder
  • A business model that isn’t the blessed recurring revenues, like e-commerce transaction, ad models or app purchases.

Really, it’s going to take a lot of time and effort for a long time.

And it often doesn’t result in a successful funding at this stage.

Most founders should hear this and think:

“So really I need to find creative ways to build a product and get revenue traction and not waste my time raising a bigger round right now.”

Exactly. This is time much better spent for most founders.

If you had $1-2M or more in recurring revenues, 10%+ month-over-month growth, raving customer reviews, experienced founders and leaders, AND established investor relationships, your fundraising process will likely take a few months and look easier.

It won’t be easy for these founders either, but it will look easy compared to fundraising for startups with minimal traction and no momentum.

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