Raising money for a startup is something I really want to help demystify for first time entrepreneurs who have no idea where to get started.
I shared a few of the ingredients to the secret sauce of raising money throughout several blog post covering the topic over the last 3 months.
One ingredient I noticed that was missing was timming.
Timing is the one ingredient that you must nail if you want to succeed.
To help bring clarity to this critical fundraising topic, we need to look no further than a blog post written by the founder and CEO of Buffer, Joel Gascoigne.
What I’ve learned from talking with some very experienced and highly respected successful serial entrepreneurs is that there are only really two good times to raise funding. The first is when you have just an idea, and you’ve not even started to build. The second is when you have a product with good traction you can show to investors.
Gascoigne goes on to point out that first time entrepreneurs have a 0% chance at success at the idea stage because investors are looking for serial entrepreneurs with multiple successful exits as the deciding factor for investing in an idea.
So for first time entrepreneurs, the only option you have is to raise money when your product has good revenue or user traction depending on your business model and market.
How much? Read this post for specific numbers you must hit before you have a good chance to raise VC money.