FUndraising
When is the best moment to fundraise?
Over the past few weeks, I noticed a pattern when speaking with founders: most struggle to identify when the right moment to fundraise actually is.
This isn’t about seasonality or when investors are on holidays. It’s about recognizing the right moment in your business journey to raise capital.
I would even argue that there is no such thing as a perfect moment. But there are clear indicators that distinguish a strong fundraising moment from a weak one.
Either founders are too early (no. 1 reason why they get declined) or too late and miss the momentum altogether.
Today I am trying to answer the 'when' question and I am sharing an overview of the key areas that I use to assess if you are an interesting case for investors.
The perfect moment?
There is no such thing as a perfect moment to fundraise.
But if I had to define a good one, it’s when demand is clearly outpacing your capacity.
When customers are lining up to pay for your product and the only thing holding you back is a lack of resources, that’s a strong signal. You are not fundraising to find demand, you are fundraising to unlock it.
That said, demand alone isn’t enough.
Besides that, you also need to have a clear plan on what you are going to do with the money that you would raise.
You should be able to explain exactly what the money will be used for and, just as importantly, where it will get you.
“Building a better product” isn’t a plan.
A plan is knowing who you will hire, why those hires matter, how many customers that enables you to close, and what revenue that translates into.
What speaks for raising earlier?
The momentum in your market is happening right now. Waiting too long can mean missing the window while attention, capital, and customer demand are at their peak.
In fast-moving or “hot” spaces, competition doesn’t stand still. Better-funded players can outgrow you quickly, making it much harder to catch up later.
There’s also execution risk over time. Customers who are excited today may not be as happy in six months, and the narrative can shift from “we have strong momentum” to “we are seeing early churn issues”.
That story is much harder to fundraise on.
That said, some businesses, especially in hardware or deep tech, require significant upfront investment to get off the ground. But even here, the bar for institutional investors has risen dramatically (AI has changed expectations across the board).
As a result, even hardware founders are expected to show something tangible: a prototype, early validation, or clear proof that the technology works and the vision is executable.
What speaks for postponing your fundraise and wait longer?
The most heard reason to postpone fundraising is, we first want to continue growing, get more customers onboard, reach higher revenue so we are in a position to raise with a better valuation.
That's fair and smart, because if you can bootstrap, I would say you should.
Waiting can also put you in a much stronger fundraising position. Clear progress allows you to raise at a higher valuation, choose better terms, and ultimately dilute less.
There is just the fear that the momentum has past and you missed you opportunity to fundraise.
The 6 areas I look at to decide if you are ready to fundraise
Ok, but how do investors actually look at this?
When investors decide whether you are ready, they are not ticking boxes. They match if you fit into their pattern and they do it fast.
Here are the 6 areas I would look at to assess if you are ready to fundraise or not.
Team
Let’s start with the obvious one: the team.
Do you even have one?
Investors love backing founders with a strong track record, people who have built, shipped, sold, or failed before and learned something useful. Clear roles, complementary skills, and founder alignment matter more than fancy titles.
What about solo founders?
Honestly: it depends.
Solo founders can raise, but investors will look harder at:
Your insights into the industry, what do you have what others don't have and make you the perfect person to build this
Your ability to attract outstanding talent
Whether you have already built something real on your own
A solo founder with momentum beats a team with vibes but no output.
Market
Next up: the market opportunity.
Investors have seen market sizing slides a million times. They know the game.
Some common red flags:
If you are pitching a trillion-dollar market, you would better have very strong arguments why you can access it (otherwise… they will assume you are a bit delulu).
If your SAM is > €100B, chances are you are including chunks of the market you are not actually addressing.
On the flip side, if your SAM is < €1B, investors may wonder if this can ever return the fund, even if the business itself is solid.
It's a thin line between being over the top and selling yourself too conservatively. Investors do want to see big numbers, even if everyone knows it's going to be hard to get there ;)
Traction
Expectations on traction have increased tremendously over the last years. Building and shipping products has become much easier hence the pressure on you to have already sold your product without any resources is much higher.
Typical investor questions this:
How many co-pilots are paying today?
What’s the revenue per co-pilot (MRC, one-time, ACV)?
How much of that revenue is recurring?
What’s your month-over-month growth?
Has anyone asked to expand, upgrade, or add seats?
What percentage would convert to full customers if the product were ready?
Ten obsessed customers will always beat a hundred “yeah this is interesting” conversations.
Pipeline
Traction is about what you have already closed and your pipeline is about what’s coming next.
Investors want to know:
How many potential customers are already in conversation?
How much revenue potential is that representing?
How strong is the intent? How likely are they to close?
Fundraising gets really interesting when you can say: We have more demand than we can currently handle. That’s a good indicator that it makes sense to fundraise.
Competition
If you say you have no competition, that’s not confidence, it’s a red flag.
Investors will immediately think:
Either this problem isn’t real
Or you don’t understand the market well enough
In order to show that you actually know the market well enough, you should have a clear idea who is fundraising in your space. Are there lots of startups currently that are in that space and they are all receiving money? Looks like your momentum is picking up and it's a good moment to speak with investors.
Financials
You don’t need perfect numbers, but you do need a clear plan.
Investors expect you to know:
How much money you need for the next 18–24 months
Where that money will actually go
What milestones this round unlocks
Good answers sound like: This round gets us to X customers, Y revenue, and Z proof point for the next raise.
If you have that figured out, you are ready to speak with them.
What does that mean for you?
If you don't really have answers to the topics above, you are probably not ready to launch yet your fundraise. And most likely it would be a waste of time to start now your fundraise because investor conversations won't materialize.