Summer fundraising advice for first-time founders with former investor, Charlie O’Donnell

“The summer is a bad time to fundraise.”

If you peruse the startup/VC communities on LinkedIn and X, chances are that you’re bound to see someone express a similar sentiment to the one above.  

As the summer season rolls in, many first-time founders find themselves grappling with the complexities of fundraising during the warmer months. Over the last few years, particularly on the heels of the COVID pandemic, the time between June and September became synonymous with a very slow fundraising period. 

The thinking was that calendars are packed with vacation blocks and any free time busy VCs had all but disappeared. 

How much truth is there to this though? The reality is much more nuanced and not nearly as black and white as ‘warm = no fundraising.’ 

There are always deals that are no-brainers and will raise funds effortlessly, and those that won't, regardless of the season. The remaining majority lies in a middle ground where strategy can often make or break the goal of raising capital.

Here, we dive into the summer fundraising process and share some advice for keeping the momentum going based on a conversation with former investor, Charlie O’Donnell.

Understand the market

Before diving into any fundraising rounds, it's important to have a clear understanding of where the market currently stands. Before coming up with a north star, you should first speak with multiple founders who have successfully raised funds recently and compare their experiences and metrics with your own. 

For example, if you're aiming for a $3.5 million seed round and you find that similar startups have significantly higher figures, adjust your expectations accordingly. 

“It doesn't even necessarily need to be about revenue. It could be a consumer product that has roughly the same amount of installs,” said Charlie. “But know the market going in, so your expectation levels are appropriate before you go in.”

Fundraising requires commitment 

Kicking off a fundraising round shouldn't be a trial run. 

If you’ve committed to raising capital, be 100% firm in your decision. Avoid reaching out to just a handful of potential investors and waiting to see the response. Instead, approach a group of at least ten funds whose investment sweet spots align with your business. 

This ensures that you gather plenty of interest and meaningful contact points, minimizing the risk of things falling apart in the initial stages.

“What you don't want to have happen is, you go to raise, you do your first wave, your first wave is kind of small. Ultimately, it's really only a fit for three or four people. You get kind of close with one, but you just don't get any bites,” said Charlie. “That's just not enough information. That's not enough to know whether or not you're actually going to be able to raise.”

But don't overlook one critical step here: after reaching out to a group of VCs, don't rest on your laurels. Be sure to actually define your timeline with these investors and ensure they can commit to it.

Push for clarity

One common mistake first-time fundraisers make is misinterpreting the often vague and non-committal language of VCs. Responses like "Interested" or "This is interesting" can leave founders searching for more clarity and, even worse, making assumptions. 

To be proactive, don't hesitate to push for clearer, more informative responses. Ask direct questions like, “Are you interested in championing this within your team?” to differentiate between genuine interest and polite disinterest. 

Off the back of these questions, be sure to seek detailed feedback to understand any concerns or reservations they might have, so you can address these proactively.

The benefit of this? VCs will take you a bit more seriously. 

“If you come in, you're serious, you say, ‘Here's my timeline, here's the information, here's my data room.’ You're prepared; you're clearly driving the truck. That's going to be their perception of how you run founder-led sales,” said Charlie.

Be thoughtful in your approach

Knowing your VCs interests and background can significantly increase your chances of securing a meeting. Customized, thoughtful outreach has a much higher chance of getting noticed and piquing interest than generic, copy-paste pitches.

“If I get a cold email where I'm like, 'You wrote this exact email to every single other person,' I'm predisposed to pay less attention to that because one, it's bad signaling on, ‘Okay, this is probably not a savvy sales-oriented founder,” said Charlie. 

Instead, try to highlight specific points about their background, previous roles, or talks they may have done to showcase that you didn't breeze through your due diligence. 

Leverage reference points

And finally, try to get introductions or references from those who could be valuable due diligence points for VCs. Feedback from portfolio companies or experts within your industry can provide a solid endorsement as you try to secure meetings and, eventually, funding. 

“If you are retail tech and you sell into an e-commerce player that they have invested in, you're much better off,” said Charlie.

“Having somebody from that company reach out to the founder and say, ‘Hey, we just took a meeting with this company that solves a really specific problem that we have, and we're inclined to start buying their tech…’ would be very helpful for you.”

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