193. Startup Maxims: Always Be Fundraising. Really? Artwork

VC Minute

Quick advice to help startup founders fundraise better. Founders, do you feel like you're fundraising on an uneven playing field? You are. The VC minute is here to help you level up. Venture capitalists navigate pitches and negotiate investments every day. They know the ins and outs and are up-to-date on the current funding environment. But as a founder, it may be your first foray into fundraising, and no matter how much success you've had in other areas nothing truly prepares you for the fundraising journey. The VC Minute was created to help founders close this gap. While it may seem like securing an investment at the seed stage is mostly driven by luck, there are steps founders can take to increase the odds of successfully raising a round. And that's what we're going to cover on the VC Minute through a series of short episodes. I'm going to share with you insights to help navigate the seed stage financing dynamics. I'm Rich Maloy, Managing Partner at SpringTime Ventures with 25 years business experience a dozen years in the startup ecosystem. I've applied my experience from sales, finance, and venture investing, to help startup founders fundraise better.

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193. Startup Maxims: Always Be Fundraising. Really?

March 05, 2024 • Rich Maloy • Season 4 • Episode 193

0:00 | 2:22

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ABF. Always Be Fundraising. Should you really always be fundraising? Here are some tips on how to evaluate if this is right for you.

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About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.

Rich 0:01

Always be fundraising. Really. Always? First off, you should be wary of any pithy phrase with a certitude. Moreover, any founder that has even attempted to fundraise, let alone see a raise through to completion, will know how it is an all-consuming distraction. I joked about this in episode 18 Runway, saying that investors want to know what your runway is after you raised this capital, because fundraising is a waste of your time. Okay, well, not really a waste of your time. But it does take you away from what you set out to do: build a truly transformative business. So why ABF? Always. Be. Fundraising. As you can probably surmise, this is about staying in touch with investors, not about actively selling equity on an ongoing basis. The simple act of sending investor updates is part of the ABF mindset. One update to your current investors. And a second update to your prospective investors, minus sensitive financial or strategic information, of course. Founders to take ABF to the next level will take introductions to prospective investors in between rounds, whether that's through referrals or their own outreach. They keep their fundraising CRM live and keep those conversations going. The main benefit here is that you get to build relationships. There's that "relationship" word again. You're not asking for money, you might not even be asking for advice. You are talking with folks and starting that relationship. But there are downsides to ABF. Top of which is that fundraising as a distraction. You set out to build a business, not just fundraise. If things are going well, you need to be in the business and you don't need to be talking to investors. If things are going to shit, you need to be in the business, fixing it. Not talking to investors who will not invest in you while the business is struggling. So always be fundraising. At a minimum, I think the quarterly prospective investor updates is a great way to stay top Then it's up to you to decide if you want to actively ABF. Or just turn it on selectively.

Rich Maloy

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