Founder Tips No. 5: Fundraising Do’s and Don’ts

Fundraising is one of those things founders love to talk about before they have anything real to fund.

“We’re raising.”
“We’re speaking to funds.”
“We have investor interest.”
“We’re just looking for the right lead.”

Fine. But none of that means anything until money lands in the bank account.

Fundraising is not a badge of honour. It is not validation. It is not the business. It is a long, slow, distracting process where your story, timing, market, team, traction and cap table all get tested at the same time.

If you do it badly, you do not just waste time. You can damage the company before it even gets started.

These are the main fundraising lessons I would tell any founder before they start.

1. Do Not Think You Need Capital on Day One

A lot of founders say: “We need funding to build the product.”

In most cases, that is already a bad sign.

Harsh truth: if you cannot move anything forward without capital, you are probably not ready to raise capital.

At the beginning, you should still be able to create some kind of signal. Build a rough MVP. Put up a landing page. Speak to users. Run discovery calls. Sell manually. Find design partners. Get letters of intent. Prove that someone cares.

You do not need a polished product to start. You need evidence.

Investors do not want to fund a founder who is waiting for permission to begin. They want to see that you can create momentum with limited resources. If nothing moves before money, there is no reason to believe money will magically fix it.

Capital should accelerate something that is already moving. It should not be the thing that makes the startup exist.

2. Do Not Give Away Equity to Too Many Advisors

Advisors can be useful, but founders often treat them like decoration.

They add 10, 15 or 20 advisors because it makes the deck look stronger. Then they give away equity to people who promise to “open doors”, “make intros”, “help with strategy” or “support the raise”.

I have seen founders give away around 20% of the company across a few advisors before the business had even properly started. That is insane.

No serious investor wants to see a cap table where advisors already own a material part of the company and the people actually building it are diluted too early.

An advisor should earn equity through real, measurable value, not vague promises. If someone is getting equity, there should be clarity around what they are doing, what access they bring, how often they help, whether the value is real, and whether it vests over time.

Do not pay for “door opening” with permanent ownership unless the door actually opens.

Equity is expensive. Treat it like it matters, because later it will.

3. Do Not Raise From VC If You Are Not a VC-Scale Business

Not every business should raise venture capital.

This sounds obvious, but a lot of founders still ignore it.

VCs need companies that can scale very fast and potentially return the fund. That means large markets, high growth potential, strong margins, credible expansion, and a path to a very large outcome.

If your business is a niche product, agency-like service, consultancy, local marketplace or slower-growth cash-flow business, that does not make it bad. It may be a great business.

It just may not be a VC business.

Once you take VC money, the rules change. Investors will expect speed, growth, ambition and a path to a big exit. If you want to build a profitable, controlled, slower-growth company, that is fine. But then do not take venture money and act surprised when investors expect venture-style growth.

Choose the right capital for the business you are actually building, not the business you wish sounded more exciting.

4. Do Not Pitch the Wrong Investors

This one is simple, but founders still get it wrong.

If an investor only backs pet-tech, why are you sending them your fintech deck?

If a fund only invests in climate infrastructure, why are you pitching them a creator economy app?

If they only do Series A and you are pre-product, why are you wasting your time?

It makes no sense.

Some founders spray their deck everywhere and call it fundraising. That is not fundraising. That is spam with a pitch deck attached.

Investor targeting matters. Before reaching out, check what they actually invest in: stage, geography, sector, cheque size, business model, portfolio, and whether they lead rounds or follow.

A good investor list should be intentional. Not massive. Not random. Intentional.

If the investor does not invest in your category, stage or geography, save your time. They are not your investor.

5. Do Not Start With Your Dream Investors

A lot of founders immediately go after their top five dream investors.

Usually, that is a mistake.

Your first few investor conversations will probably be rough. Your pitch may be too long. Your deck may have gaps. Your answers may be weak. You may not know which objections come up most often.

That is normal. But you do not want to discover all of that on the call with the fund you care about most.

Start with relevant investors who are not your absolute top targets. Use those calls to sharpen the story, understand objections, tighten your numbers and learn what investors actually focus on.

Then go to your priority investors when your pitch is stronger.

Do not waste your best shots while you are still practising.

6. Avoid Brokers

Be very careful with fundraising brokers.

At early stage, most of them are not helpful.

The best investors want to speak directly to the founder. They want to see how you think, how you sell, how you handle pressure, how well you understand the market and whether you can explain the business without someone packaging it for you.

You can get help with the deck, narrative, targeting, data room and intros. That is fine. But outsourcing the actual fundraising relationship is usually a weak signal.

At pre-seed and seed, fundraising is founder-led.

If you cannot sell the company, why should an investor believe you can sell the product?

7. Manage Your Cap Table Simply

At pre-seed and seed, you do not need a fancy cap table platform.

Use Excel or Google Sheets.

You need to know who owns what, how much has been issued, what options exist, what advisors have, what happens after the next round and how dilution works.

That is it.

Buying software too early just increases opex and usually adds no real value. A nice-looking dashboard does not make the company more investable. It just makes a simple table look expensive.

Keep it simple until the complexity is real. Spend money on things that move the business forward.

8. Understand That Fundraising Takes Time

Fundraising takes longer than founders expect.

From the first conversation to money actually landing in the bank account, it can take 3 to 12 months, depending on the business, market, traction, investor type, round size, timing and whether you are building into a trend investors already care about.

Some rounds move quickly. Most do not.

This is why runway matters. If you start fundraising when you are already desperate, you are in a weak position. You will rush, accept worse terms, overreact when investors go quiet and make bad decisions.

Fundraising is not just pitching. It is timing, preparation and survival.

9. Do Not Lie About Investor Interest

Some founders try to manufacture momentum.

They say other investors are “in”, “committed”, “moving fast” or “very interested” when that is not actually true.

Do not do this.

The investor world is smaller than founders think. Funds talk. Angels talk. People compare notes. If you lie, it can come back quickly.

There is a big difference between saying “we are having active conversations” and saying “we have committed investors” when nobody has committed.

Be confident. Create momentum. But do not lie.

False urgency can destroy trust. Once trust is gone, the round is probably gone too.

10. Be Careful Approaching Investors Who Already Back a Similar Company

Before approaching a VC, check their portfolio.

If they already invested in a company very similar to yours, be careful. They may take the call, but that does not mean they will invest. In many cases, they will not back two companies attacking the same market in the same way.

Worse, you may end up giving them free insight: market thinking, product angles, customer feedback, positioning and a fresh view of the opportunity. That can easily find its way back into their existing portfolio, directly or indirectly.

Not every overlap is dangerous. SometiFounder Tips No. 5: Fundraising Do’s and Don’ts

Fundraising is one of those things founders often talk about before there is anything real to fund.

“We’re raising.” “We’re speaking to funds.” “We have investor interest.” “We’re just looking for the right lead.”

Fine. But none of that means anything until money lands in the bank account.

Fundraising is not a badge of honour. It is not validation. It is not the business. It is a long, slow and distracting process where your story, timing, market, team, traction and cap table all get tested at the same time.

If you approach it badly, you do not just waste time. You can damage the company before it even gets started.

These are the main fundraising lessons I would give to any founder before they start.

1. Capital Should Accelerate, Not Create, Progress

A lot of founders say: “We need funding to build the product.”

In most cases, that is already a bad sign. Harsh truth: if you cannot move anything forward without capital, you are probably not ready to raise capital.

At the beginning, you should still be able to create some kind of signal. Build a rough MVP. Put up a landing page. Speak to users. Run discovery calls. Sell manually. Find design partners. Get letters of intent. Prove that someone cares.

You do not need a polished product to start. You need evidence.

Investors do not want to fund a founder who is waiting for permission to begin. They want to see that you can create momentum with limited resources. If nothing moves before money, there is no reason to believe money will magically fix it.

Capital should accelerate something that is already moving. It should not be the thing that makes the startup exist.

2. Treat Equity Like Expensive Currency

Advisors can be useful, but founders often treat them like decoration.

They add 10, 15 or 20 advisors because it makes the deck look stronger. Then they give away equity to people who promise to “open doors”, “make intros”, “help with strategy” or “support the raise”.

I have seen founders give away around 20% of the company across a few advisors before the business had even properly started. That is insane.

No serious investor wants to see a cap table where advisors already own a material part of the company and the people actually building it are diluted too early.

An advisor should earn equity through real, measurable value, not vague promises. If someone is getting equity, there should be clarity around what they are doing, what access they bring, how often they help, whether the value is real, and whether it vests over time.

Do not pay for “door opening” with permanent ownership unless the door actually opens.

Equity is expensive. Treat it like it matters, because later it will.

3. Match the Funding Route to the Business Model

Not every business should raise venture capital.

This sounds obvious, but a lot of founders still ignore it.

VCs need companies that can scale very fast and potentially return the fund. That means large markets, high growth potential, strong margins, credible expansion and a path to a very large outcome.

If your business is a niche product, agency-like service, consultancy, local marketplace or slower-growth cash-flow business, that does not make it bad. It may be a great business.

It just may not be a VC business.

Once you take VC money, the rules change. Investors will expect speed, growth, ambition and a path to a big exit. If you want to build a profitable, controlled, slower-growth company, that is fine. But then do not take venture money and act surprised when investors expect venture-style growth.

Choose the right capital for the business you are actually building, not the business you wish sounded more exciting.

4. Pitch Investors Who Actually Invest in Your Category

This one is simple, but founders still get it wrong.

If an investor only backs pet-tech, why are you sending them your fintech deck? If a fund only invests in climate infrastructure, why are you pitching them a creator economy app? If they only do Series A and you are pre-product, why are you wasting your time?

It makes no sense.

Some founders spray their deck everywhere and call it fundraising. That is not fundraising. That is spam with a pitch deck attached.

Investor targeting matters. Before reaching out, check what they actually invest in: stage, geography, sector, cheque size, business model, portfolio and whether they lead rounds or follow.

A good investor list should be intentional. Not massive. Not random. Intentional.

If the investor does not invest in your category, stage or geography, save your time. They are not your investor.

5. Practise Before Going to Your Dream Funds

A lot of founders immediately go after their top five dream investors.

Usually, that is a mistake.

Your first few investor conversations will probably be rough. Your pitch may be too long. Your deck may have gaps. Your answers may be weak. You may not know which objections come up most often.

That is normal, but you do not want to discover all of that on the call with the fund you care about most.

Start with relevant investors who are not your absolute top targets. Use those calls to sharpen the story, understand objections, tighten your numbers and learn what investors actually focus on.

Then go to your priority investors when your pitch is stronger.

Do not waste your best shots while you are still practising.

6. Keep Fundraising Founder-Led

Be very careful with fundraising brokers.

At early stage, most of them are not helpful.

The best investors want to speak directly to the founder. They want to see how you think, how you sell, how you handle pressure, how well you understand the market and whether you can explain the business without someone packaging it for you.

You can get help with the deck, narrative, targeting, data room and intros. That is fine. But outsourcing the actual fundraising relationship is usually a weak signal.

At pre-seed and seed, fundraising is founder-led.

If you cannot sell the company, why should an investor believe you can sell the product?

7. Keep the Cap Table Simple Until It Needs to Be Complex

At pre-seed and seed, you do not need a fancy cap table platform.

Use Excel or Google Sheets.

You need to know who owns what, how much has been issued, what options exist, what advisors have, what happens after the next round and how dilution works.

That is it.

Buying software too early just increases opex and usually adds no real value. A nice-looking dashboard does not make the company more investable. It just makes a simple table look expensive.

Keep it simple until the complexity is real. Spend money on things that move the business forward.

8. Start Earlier Than You Think

Fundraising takes longer than founders expect.

From the first conversation to money actually landing in the bank account, it can take 3 to 12 months, depending on the business, market, traction, investor type, round size, timing and whether you are building into a trend investors already care about.

Some rounds move quickly. Most do not.

This is why runway matters. If you start fundraising when you are already desperate, you are in a weak position. You will rush, accept worse terms, overreact when investors go quiet and make bad decisions.

Fundraising is not just pitching. It is timing, preparation and survival.

9. Build Momentum Honestly

Some founders try to manufacture momentum.

They say other investors are “in”, “committed”, “moving fast” or “very interested” when that is not actually true.

Do not do this.

The investor world is smaller than founders think. Funds talk. Angels talk. People compare notes. If you lie, it can come back quickly.

There is a big difference between saying “we are having active conversations” and saying “we have committed investors” when nobody has committed.

Be confident. Create momentum. But do not lie.

False urgency can destroy trust. Once trust is gone, the round is probably gone too.

10. Check Portfolio Conflicts Before Sharing Too Much

Before approaching a VC, check their portfolio.

If they already invested in a company very similar to yours, be careful. They may take the call, but that does not mean they will invest. In many cases, they will not back two companies attacking the same market in the same way.

Worse, you may end up giving them free insight: market thinking, product angles, customer feedback, positioning and a fresh view of the opportunity. That can easily find its way back into their existing portfolio, directly or indirectly.

Not every overlap is dangerous. Sometimes the market is broad enough. Sometimes the companies are different enough. Sometimes the fund has a thesis and wants more exposure.

But do not be naive.

Do not give away your know-how for free to someone already backing your competitor.

11. Understand the Investor Relationship

There is a saying among founders: investors are not your friends.

It is true.

That does not mean they are bad people. Good investors can be extremely helpful. They can make intros, support hiring, challenge your thinking and help in difficult moments.

But the relationship is commercial.

They invest because they expect a return. If you take the money, they will expect you to do everything in your power to deliver. If you stop executing, avoid hard decisions, hide bad news or treat the company like a lifestyle project, they will lose confidence fast.

And when confidence goes, support becomes very conditional.

If you want encouragement with no pressure, do not raise venture capital. If you take investor money, understand the responsibility that comes with it.

12. Raise for a Reason, Not for Optics

Some founders treat fundraising like validation.

They think raising money means they have made it.

It does not.

Raising money means someone has bought the opportunity to see whether you can build something valuable. That is all.

The real work starts after the money arrives. Now you have expectations, dilution, reporting, a burn rate, milestones and pressure to grow. If the underlying business is weak, funding can make the problems bigger, not smaller.

Money can hide bad assumptions for a while. It cannot fix them forever.

Do not raise to look successful. Raise because the business has a clear reason to use capital.

13. Know What the Money Unlocks

Before raising, know exactly what the capital will unlock.

Not vague answers like “we will build the product”, “we will grow the team” or “we will scale”.

Be specific.

The money should buy progress: build the MVP and onboard 5 design partners, reach £20k MRR, hire one senior engineer, run 6 months of enterprise pilots, launch in one new market or convert 3 paid customers from the current pipeline.

Investors want to know that their money turns into measurable movement.

A good raise should have a clear use of funds, clear milestones and a clear next financing story.

If you cannot explain what the money does, you are not ready to raise.

14. Be Careful With Peak-Trend Valuations

High valuations feel great in the moment.

They make the company look hot. They make the founder feel like the market believes. They make the round sound more impressive.

But a high valuation can become a trap, especially if you are raising at the peak of a trend.

We saw this with areas like creator economy, web3 and other hype cycles. When the market is hot, valuations get pushed up quickly. Investors compete, founders get confident, and suddenly companies with very little traction are raising at numbers that only make sense if the trend keeps going perfectly.

But trends change.

When the market cools down, the next round becomes much harder. If you raised at an inflated valuation, you now need to grow into that number before you can raise again. If you cannot, you either face a flat round, a down round or no round at all.

That can kill the business.

Down rounds are painful. They hurt morale, damage the cap table, scare investors and make it harder to attract new money. Even if the company is still good, the previous valuation can become a weight around its neck.

A sensible valuation gives you room to grow.

A vanity valuation gives you a headline and then creates problems later.

Do not optimise for the highest possible valuation. Optimise for a valuation you can beat in the next round.

Final Thought: Funding Is Fuel, Not the Finish Line

Fundraising is not the goal.

Building a real business is the goal.

Capital is only useful if it helps you move faster toward something that already has signal. Do not raise on day one because you are scared to start. Do not give away equity to advisors who only promise introductions. Do not chase VC if you are not building a VC-scale company. Do not pitch random investors. Do not waste your best investor conversations before your pitch is ready. Do not lie about momentum. Do not chase a valuation that may trap you later.

And do not forget that investors talk.

Most importantly, do not confuse funding with success.

The best founders create progress before capital.

Then they use capital to accelerate it.

mes the market is broad enough. Sometimes the companies are different enough. Sometimes the fund has a thesis and wants more exposure.

But do not be naive.

Do not give away your know-how for free to someone already backing your competitor.

11. Investors Are Not Your Friends

There is a saying among founders: investors are not your friends.

It is true.

That does not mean they are bad people. Good investors can be extremely helpful. They can make intros, support hiring, challenge your thinking and help in difficult moments.

But the relationship is commercial.

They invest because they expect a return. If you take the money, they will expect you to do everything in your power to deliver. If you stop executing, avoid hard decisions, hide bad news or treat the company like a lifestyle project, they will lose confidence fast.

And when confidence goes, support becomes very conditional.

If you want encouragement with no pressure, do not raise venture capital. If you take investor money, understand the responsibility that comes with it.

12. Do Not Raise Money Just to Look Like You Are Winning

Some founders treat fundraising like validation.

They think raising money means they have made it.

It does not.

Raising money means someone has bought the opportunity to see whether you can build something valuable. That is all.

The real work starts after the money arrives. Now you have expectations, dilution, reporting, a burn rate, milestones and pressure to grow. If the underlying business is weak, funding can make the problems bigger, not smaller.

Money can hide bad assumptions for a while. It cannot fix them forever.

Do not raise to look successful. Raise because the business has a clear reason to use capital.

13. Know What the Money Is For

Before raising, know exactly what the capital will unlock.

Not vague answers like “we will build the product”, “we will grow the team” or “we will scale”.

Be specific.

The money should buy progress: build the MVP and onboard 5 design partners, reach £20k MRR, hire one senior engineer, run 6 months of enterprise pilots, launch in one new market or convert 3 paid customers from the current pipeline.

Investors want to know that their money turns into measurable movement.

A good raise should have a clear use of funds, clear milestones and a clear next financing story.

If you cannot explain what the money does, you are not ready to raise.

Final Thought

Fundraising is not the goal.

Building a real business is the goal.

Capital is only useful if it helps you move faster toward something that already has signal. Do not raise on day one because you are scared to start. Do not give away equity to advisors who only promise introductions. Do not chase VC if you are not building a VC-scale company. Do not pitch random investors. Do not waste your best investor conversations before your pitch is ready. Do not lie about momentum.

And do not forget that investors talk.

Most importantly, do not confuse funding with success.

The best founders create progress before capital.

Then they use capital to accelerate it.

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Best of luck with fundraising! You can do it!