One of the biggest traps to fall into is fundraising when you’re not ready. The process should be followed on your own company’s terms and only when you are absolutely all set.
To be fully prepared, you’ll need the right material, documentation and data (see takeaway 8), as well as the internal bandwidth to support both the fundraising effort and the day-to-day running of your business.
If an investor gets in touch saying they want to invest next week, that should not be the trigger for a funding round. It’s fine to say you’re not quite ready yet. Investors will appreciate the transparency and the fact you stick to your guns. Then, when you’re ready, you can reach back out (the email below is an example of Qonto getting back in touch with interested investors when the time was right.)
It also helps to wait until multiple investors are interested, as it gives you more bargaining power (see takeaway 7).
If raising too early jeopardizes your chances of securing investment, raising too late threatens the long-term survival of your business by exhausting your reserves.
Therefore, timing is crucial.