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We’ve seen both ends of the spectrum: some founders close oversubscribed rounds in just a few days, others spend months chasing that elusive first term sheet, wondering if they’re doing it all wrong. It’s natural to read into that experience, to think a fast raise signals strength or a slow one means something’s broken. But speed or ease of your raise doesn’t predict long-term success. Some of the strongest companies out there barely scraped together their first round.
Still, running a smooth, focused fundraise can set you up for a stronger start and save you some time so you can get back to building. Because fundraising will take over your calendar if you’re not intentional. That’s why it’s critical to prep before you start, timebox the process, and stay in control throughout.
We’ll walk through each phase of the fundraising journey: deciding when to raise, crafting your story, running a disciplined process, and managing relationships after the round closes. You’ll learn how to build the materials that matter, navigate valuation and dilution, and bring the right people onto your cap table.
Deciding when to raise
The ideal timing
Fundraising isn’t always a matter of need, it’s often a matter of timing. You might raise even if you don’t strictly need the money, simply because the conditions are right. Maybe you’ve landed a major customer, hit a key product milestone, or noticed a surge in inbound interest. These moments create momentum - and momentum is what fuels investor excitement.
That’s why it helps to think in terms of your ‘local maximum’: the point where your traction, narrative, and market signals are all peaking relative to your recent history. It might not be your ultimate destination, but it’s a moment when things look their best so far. Investors are drawn to upward trends and raising at this point can shift the power dynamic and give you more control over the process.
Too early vs too late
Still, timing isn’t just about opportunity, it’s about readiness. Once you raise, you’re not just taking on capital, you’re committing to your cofounder(s) and to building a company for the next several years. You need to be sure that’s really what you want.
Raise too early, and you may be tempted to accelerate prematurely before you’ve found real product-market fit, which often results in wasted capital. Investors might initially back your vision, but their focus quickly turns to execution. If traction lags, confidence fades, and future fundraising gets harder.
Wait too long, and the opportunity might slip away. Momentum doesn’t last forever. If you miss your window, when the narrative is fresh and your numbers are trending, you may end up pitching in a cooler market, with less leverage, more competition and tougher terms.
And remember: once you raise, the clock starts ticking. Investors expect visible progress within 12–18 months, often measured in product milestones, revenue growth, or team expansion. If it takes too long to go from seed to Series A, the perceived attractiveness of your company can decline.
In short, timing matters as much as the story you tell. The best raises happen when you’ve built real momentum and you’re in the driver’s seat.
What you need to raise
There’s no universal benchmark for what makes a seed-stage company “fundable.” Team size, customers, user metrics, they vary by sector and model. Despite having raised more than 40 seeds, we’re still often surprised by which companies generate seed momentum and which don’t.
You typically raise on one of two things: a compelling story or clear results. Either you’re early enough (before traction and even before product) that investors are backing the promise (your team, vision, and market) or you’ve hit your first results that proves the model is working. In that in-between zone, fundraising is extremely difficult.
If you’re aiming to raise on traction, you need to show real progress. That means active usage, strong engagement, and clear customer adoption. Ideally, some of those customers are already paying - or clearly intend to. You should also be able to communicate a focused, credible roadmap to your next major milestone. That might include continued product development, key hires, go-to-market execution, or early revenue. The important part is that you understand what needs to happen next and can explain how you plan to get there.
It’s a strong signal if you’ve already identified or secured the early hires needed to execute that plan. Investors want to see that you’re not just raising capital, you’re raising to drive specific outcomes, and you know what those are.
Insight from Rodolphe Ardant, cofounder of Spendesk
Fundraising is something that entirely depends on the type of entrepreneurial journey you want to pursue, and one of the first questions every founder should ask themselves is: Do I genuinely need to raise money and if so, for what specific purpose?
When you choose to enter the VC world, you are not just raising capital; you are committing yourself to a very particular kind of adventure, one that comes with its own set of expectations and demands.
That’s why, as an entrepreneur, it is absolutely critical to be extremely clear from the outset about why you are building your company and what your real motivations and drivers are — because the reality is that, in a lot of cases, the traditional VC path isn’t necessarily the right fit, even though many founders rush toward it without fully considering the implications.
In our case at Spendesk, we knew fairly early on that the VC model made sense for us because it aligned with the level of ambition we had and the amount of risk we were willing to take but even then, the journey wasn’t as straightforward as it might seem in hindsight.
In the very early days, when we first started speaking with VCs, it didn’t imme- diately click; many investors didn’t fully understand our product or the poten- tial market opportunity, which meant that raising capital from them was not a natural or easy fit at that stage.
Meanwhile, what we did have was incredibly strong enthusiasm from our early clients, and that’s what made the difference: for our seed round, we ended up raising mostly from angels, including a number of our own customers, which gave us strong momentum and allowed us to close the round in just three weeks.
When it came time to raise our Series A, the process became a bit more classic: I had built a proper deck, I was able to clearly articulate a compelling vision for where we wanted to take Spendesk, and I had a very strong connection with Dom Vidal from Index Ventures, which made a real difference.
By that point, we also had extremely positive feedback from our users and early metrics that were very strong — we were seeing 20% week-on-week growth in usage — so when you show up to investors with that kind of traction and energy, it becomes obvious that something exciting is happening, and it changes the entire dynamic of the fundraising conversation.
Advice-wise, it’s really two main things:
Be clear about why you are raising money and what you are trying to achieve. Don’t get caught up in the hype, think about what you actually need.
Choose the right partner. Everyone says this, but it’s true: you need to pick investors you genuinely get along with, just like choosing co-founders. You need someone with the same ambition, with aligned expectations, and with whom you can have honest, direct conversations even about tough scenarios.
Build your story from day 1
Prepare everything before your roadshow
Once you’re in the middle of fundraising, everything accelerates and you won’t have time to handle fundraising prep while pitching. Every hour you spend scrambling to fix your deck is an hour you’re not pitching, building, or closing.
That’s why you need to front-load all the preparation work. You’ll need to have ready:
Your story
Your executive summary
Your pitch deck
Your data room
And also administrative tasks like choosing your lawyers in advance.
“Preparation is everything. Rehearse your deck, refine the story, test your numbers. And before you pitch your “dream” VCs, start with 4–5 funds that you know aren’t the right fit. Use them as live practice, they’ll challenge you, they’ll poke holes, and that will make your pitch sharper. In those early rounds, feedback from real investors is gold. They see hundreds of decks and they’ll spot what you’re missing faster than you will.”
– Olivier Pailhes, cofounder of Aircall
Nail the narrative
From the very beginning of your company, you should start crafting the first version of your story and then commit to refining it continuously as you build. A compelling narrative doesn’t appear overnight. It takes time, practice, and feedback. Founders often underestimate how difficult this is.
We recommend starting with a simple executive summary: 7 questions that capture the essence of your story. Treat it as a living document. Iterate as your company evolves, and only then build it into a full pitch deck.
Use this executive summary to rehearse your pitch. Practice in front of a mirror, with teammates, and with trusted advisors. And don’t hesitate to bring in a coach, it can make a meaningful difference in how clearly and confidently you present.
Do not write your actual pitch deck before you’ve nailed your narrative. If you’re still figuring out what the story is, working in slides will slow you down and lead to weak framing. Get your narrative to at least 95% clarity before working on the deck.
Anticipating objections
When fundraising, it’s essential to anticipate the key objections investors might raise, things like “I’m not investing because a major competitor just raised a big round,” or “the market looks too crowded.” These concerns are common and predictable, and you need to be ready with clear, sharp responses. For each objection, build a well-structured argument that’s ideally supported by precise, data-backed reasoning: market segmentation, differentiation, go-to-market insights, or unique traction numbers. Some of these answers can be detailed in your dataroom (e.g. competitive landscape, pipeline data), but others should be rehearsed and delivered convincingly in the room. The best founders dry-run these hard questions in advance (like a stress test) so nothing catches them off guard.
Getting the executive summary right
Here’s a suggested structure for getting it right:
Getting the pitch deck right
There’s no one-size-fits-all deck. Every company is different, so your pitch should reflect your unique story. That said, here’s a recommended flow that we often see work well. Use this as a starting point and tailor it to fit your narrative.
Insight from Amaury Sepulchre, Partner and Cofounder of Hexa
Tips for a great pitch deck:
Tailor your story: This list is not exhaustive. Prioritize what makes your story strong. Remove anything that doesn’t serve that goal.
Hypothesis-driven funding: Every round should test a clear set of hypotheses. State what you’re trying to prove or disprove, and the metrics you’ll use to measure progress.
No exit slides: Don’t include an “exit” slide at this stage. If an investor asks for it, they’re not aligned with your long-term ambition.
TAM discipline: Avoid vague or inflated TAMs. Be specific about your entry point and show how you expand over time. A clear go-to-market beats a trillion-dollar pie chart.
Include a ‘Reasons not to Invest’ slide: These are key beliefs that investors must align with to invest in your company. They also represent potential challenges or risks that investors need to understand and accept.
Path to $100M+ ARR: Part of the story that you need to absolutely tell, and it might be one of the hardest parts, is articulating a credible path to building a billion-dollar business. What would it actually take for your company to get there? What will it look like when it’s generating $100M+ in revenue? Why is that future plausible based on what you know today? Investors want to dream with you, you must show them a credible path to building a generational company.
Getting the data room right
Investors typically use your data room in two stages. Before offering a term sheet, they’ll use it for a quick spot check to validate your story and discuss it internally with partners. After a term sheet is issued, the data room becomes a key part of the due diligence process, providing deeper details to help finalize the investment.
A good data room is rare at seed stage, so it makes a strong impression. It shows you’re organized and serious, and it makes the investor’s job easier by helping them quickly understand your business and find the answers they need.
The easiest way to manage it is by centralizing everything in a Notion doc. That way, you can easily share a single link with investors and keep everything up to date in one place.
Below is the standard structure we recommend and what most of our companies use. It’s meant to be a guide, so feel free to adapt it based on what makes sense for your business.
Common data room mistakes
Treating it as static – Your data room should evolve. Update it regularly with new customers, milestones, and quarterly revenue.
Assuming investors understand your market – Don’t skip the basics. Educate them before diving into deep specifics.
Unclear market sizing – Always show your math. Explain how you got to your market size numbers.
Neglecting your long-term vision – Founders often focus too much on what’s built today. But investors are buying into the future. Make sure your data room tells the story of where you’re going
Overly technical roadmap – It’s tempting to list every feature and sprint. Instead, highlight focus on outcomes, not just features. What major shifts will your roadmap unlock? Share the big objectives you’re aiming for.
Tracking too many KPIs – More isn’t better. Curate a concise set of metrics that actually reflect momentum - or whatever best signals traction for your model.
Structuring your round
What instrument?
At the Seed stage, most founders face the same challenge: they need capital, but setting a formal valuation feels premature. Enter SAFEs (Simple Agreements for Future Equity), BSA AIR (the French equivalent), two instruments that have become go-to options for early-stage fundraising.
These tools are attractive for a few key reasons. First, they’re fast and lightweight. Unlike priced equity rounds, they require minimal legal work, often just a few pages of documentation, and cost a fraction of what a full capital increase would. Second, they provide flexibility. With a SAFE or BSA AIR, you can raise funds progressively, closing small tickets over time as investor interest emerges. There’s no need to round up a full cohort of investors before moving forward.
A typical SAFE includes three core terms:
The amount invested
A valuation cap
And a discount on the next round’s valuation
Importantly, no new shares are created at the time of the SAFE, this means the price per share doesn’t change, and SAFE holders aren’t yet formal shareholders. They don’t appear on the cap table or in the shareholder agreement until their instruments convert. While this structure offers simplicity, it can also create discomfort for some investors, who feel they’re in limbo: as they’re. not quite equity holders.
From the founder’s side, the biggest challenge is dilution. Since conversion happens later, usually during the next priced round, it’s hard to forecast exactly how much ownership will be given away.
Use with care, especially when stacking multiple SAFEs or BSA AIRs with different terms. Misalignment across instruments can snowball into complexity and tension.
Much has been written about whether to raise using instruments like SAFEs or BSA AIRs versus going straight to equity. We won’t cover every detail here but the key takeaway is this: they are much simpler and work well (especially in the US).
Get your cap table in order
The capitalization table is the single source of truth when it comes to ownership. It should be clean and accurate. Yet, it’s often a source of confusion and delay. There is no way around it: a founder has to have precise and confident command of their cap table. And the cap table has to be ready before the start of the fundraising.
Action points:
Have a precise and accurate pro-forma cap table in excel format.
Get assistance from your lawyer but founders should remain in control of their cap table.
After seed round, use a reputable cap table management tool (e.g., Carta, Pulley or Equify if your company is in France).
Reflect all equity issuances - including SAFEs, convertible notes, options, and warrants, with correct terms and timestamps.
Ensure that founder vesting schedules are properly documented.
Investors will review the cap table meticulously to understand their dilution, rights, and ownership stake. Ambiguities or inconsistencies here often raise red flags and can derail the process.
Choosing the right counsel
Fundraising isn’t just about storytelling and strategy, it also involves complex legal work, often under tight timelines and with limited resources. That’s why it’s critical to engage a law firm with deep experience in venture deals, and the pragmatism to balance ideal legal outcomes with real-world business pressures.
Make sure you’ve chosen your lawyer and agreed on legal fees before you begin fundraising and especially before a term sheet lands. VCs often use time pressure as a tactic. We’ve seen reputable funds issue term sheets late on a Friday with a three-day expiration window. The last thing you want is to be scrambling to secure legal counsel while already caught in the chaos of a live deal.
How to choose a counsel:
Start by asking founders in your network who’ve recently raised a similar round for recommendations.
Choose a venture capital expert locally recognized where your investors are.
Look for someone who’s worked on Series A, B, and C rounds, they’ll take more balanced positions and help you plan ahead. The best lawyers know you’re tight on cash early on and may offer flexible terms, betting on a long- term relationship as you grow.
Ask for references from their clients and verify that they have advised them not just at seed stage but through successive financing rounds.
Tips for working with counsel and what to expect from them:
Be transparent about your goals and timeline.
Your counsel’s primary goal is to defend your interests.
During negotiations, always ask your counsel about “market practice.” While you can deviate from standard practices to address specific situations, understanding market trends helps ensure your positions remain reasonable and credible.
Have them help you prepare a due diligence checklist and virtual data room.
Ask for a “pre-diligence” review of your documents before going to market.
Your counsel should help you navigate the long list of documents you’re signing. Have them walk you through the full documentation and ensure you understand every detail.
A good legal partner won’t just draft documents, they’ll anticipate investor questions and help you avoid common pitfalls.
Choosing the right investors
Who’s around the table
Understanding who’s around the table, and why, is key to running a successful fundraise. Every investor plays a different role, and knowing how to navigate those dynamics can help you structure a stronger round. Your lead investor, often a VC, typically sets the terms by issuing a term sheet and may take a board seat. Then come the co-investors: other participants in the round, which can include additional VCs, family offices, clients, or business angels. These investors often move faster and are great for quickly filling out the round once the lead is locked in. In some cases, especially in smaller seed rounds made up mostly of angels, you might not have a formal lead; in that scenario, founders usually define the valuation and terms themselves.
The many benefits of Angels
Raising from business angels isn’t just about getting cash in the bank, it’s about bringing the right people to the table. Great angels are typically current or former founders and operators who bring “smart money”, they’ve walked in your shoes, built companies, learned from mistakes, and understand what it takes to grow. They can open doors to early customers, help you hire key talent, and give real talk when you hit roadblocks. Angels tend to move faster than VCs, write more flexible checks, and often back you as a person as much as your business. For a first-time founder especially, having a few connected angels in your corner can be a superpower.
“When you raise from angels, especially operators, ex-founders, or people from your target ecosystem, you’re not just raising capital, you’re bringing in relevant expertise for your business. These are people who’ve built companies, made the tough calls, scaled teams. They challenge you where it matters: on product, hiring, GTM...
What’s more, they’re plugged into powerful networks. They make intros to customers, hires, future investors, and they do it naturally, because they’re invested in your success.”
– Evan Testa, CEO & Cofounder of Roundtable
Partner with people, not just capital
Not all value is visible on the term sheet. Some investors are hands-on, others more passive, but both can be valuable depending on your needs. The key is knowing what kind of support you’re looking for: strategic input, hiring help, intros to customers, or access to future funding. Have candid conversations upfront so you understand what each investor brings beyond the check and whether they’ll actually show up when it matters.
“When choosing investors, it’s important to be clear about the kind of support you’re looking for. Not all value comes from hands-on involvement. Sometimes, reputation alone can be a strategic asset. A well- known angel or fund on your cap table, even with a very small check, can send a strong signal to the market, helping you attract talent, open commercial doors, or gain credibility with future investors.”
– Quentin Nickmans, Partner and Cofounder of Hexa
That’s why choosing the right investors is about more than picking the biggest name. You’re not just raising money, you’re entering a long-term partnership. The relationship you have with the individual investor will shape your journey far more than the logo. Do they understand your vision? Will they challenge you in productive ways? Can you be real with them when things get tough? Finding someone you genuinely click with can make all the difference.
“Be careful who you let onto your cap table. Early on, I brought in a VC partner I didn’t click with, and I regretted it. You’re not marrying a fund, you’re marrying a partner. So make sure you genuinely respect and trust them, and that the chemistry is right. Also, do your own due diligence. Even in early-stage rounds, ask founders who’ve worked with them. When things go well, everyone’s friendly. But when it gets tough, that’s when true character shows.”
– Olivier Pailhes, founder of Aircall
Just as investors do due diligence on you, you should do the same. Talk to other founders they’ve backed. Do they follow through on their promises? Are they constructive during tough times? The wrong investor can slow you down or create friction when you least need it.
How much to raise
Raising more isn’t always better
There’s no precise formula for how much capital to raise, but two conditions should always be met:
You raise enough to support at least 24 months of runway
You raise enough to reach your next fundable milestone
These are non-negotiables. If either is missing, you risk either running out of time or failing to demonstrate enough progress for follow-on funding.
It’s important to recognize that raising more capital isn’t always better. While a larger round can give you more room to operate, it also sets a higher bar. Bigger rounds typically come with higher valuations, and those valuations create increased pressure to deliver results. It also becomes much harder to raise the next round, which typically needs to be larger. More money can lead to undisciplined spending and over-hiring, which can hurt long-term outcomes. In contrast, the constraint of limited cash tends to encourage efficiency and better decision-making - qualities that are especially valuable at the early stage.
The best founders deliberately raise smaller rounds, even when they have the option to raise more. This is not about limiting ambition. It’s about maintaining focus. Operating with some degree of constraint can create sharper prioritiza- tion, faster iteration, and stronger financial discipline.
“Capital efficiency between rounds is one of the most scrutinized metrics. Investors will look closely at what you achieved relative to what you spent. Did the funding translate into customer growth? Into revenue? Into meaningful milestones? The goal is not simply to spend, but to convert every euro into measurable progress. While every startup’s path looks different, the principle remains the same: the less capital you burn to reach scale, the stronger your position will be. Ultimately, every euro you deploy should have a clear purpose and move the company forward.”
– Amaury Sepulchre, Partner and Cofounder of Hexa
You don’t choose your valuation
Valuation might feel like a bit of a black box, but it’s crucial to understand how it actually works. One of the most important things to remember is that foun- ders don’t really “set” the valuation. It’s a reflection of market dynamics, your progress, and how much capital you’re raising.
Let’s start with the basics. Premoney valuation is the value of your company before new money enters the business. Postmoney valuation is simply premoney plus the new cash raised.
For example, if you raise $15M on a $50M premoney valuation, your postmo- ney valuation is $65M.
In practice, valuation is more art than science. While many founders imagine it as something they can define, it’s actually heavily shaped by external forces— mostly what investors are willing to pay for a given slice of equity. Here are some of the key drivers:
How much cash you need to get to the next step (often targeting at least 24 months of runway)
Comparable rounds in your space
Your ability to excite investors and bring strong VCs into the deal
Market competition - more interest can drive up your valuation
Trendiness of your sector - hot markets tend to command higher valuations
Most early rounds (Seed, A) dilute existing shareholders by 20-30%:
~13-20% goes to the lead VC.
~5% for coinvestors (other VCs, angels and other investors).
~5% to top-up the stock option pool (investors usually require this post-round).
What many founders don’t realize is that valuation is usually reverse-engineered from how much money you’re raising. Since most VCs target a fixed ownership percentage, raising more capital tends to push your valuation up, not to reduce dilution, but to maintain their share. In other words, a higher valuation often means you’re raising more money, not giving away less of your company.
Insight from Quentin Nickmans, Partner and Cofounder of Hexa
Don’t get too obsessed with valuation. Many early-stage founders fixate on valuation and dilution, but these numbers can be misleading. Just because you raise money on a $10M valuation doesn’t mean your stake is worth that much. To really understand this, try looking at it from an investor’s perspective: they typically hold preferred shares with liquidation preferences, meaning that if your company sells for less than the valuation they invested at, they’re first in line to get their money back, before any proceeds go to common shareholders. If you raise $2M at $10M and later sell for $5M, that first $2M goes straight to investors, only the remaining $3M is shared, often unevenly. And if the company sells for $2M or less, founders will get nothing at all.
This means investors have protection against a “downside” outcome and benefiting from an “upside” outcome. As shown above, founders don’t have this same protection. That’s why early-stage valuations, particularly during funding rounds, should be taken with a big grain of salt.
It’s also why it’s important not to obsess over dilution and fight for the highest possible valuation in your early rounds. What matters far more is building a company that can clear the liquidation stack and create meaningful value for everyone involved.
Running a tight fundraising process
Do not talk to VCs too early
As soon as you launch or generate buzz, you should expect inbound mes- sages from investors. This is totally normal. VCs are constantly scanning the ecosystem and will reach out quickly when something catches their eye. But at this early stage, it’s best to actively avoid spending time with VCs. While
it might feel flattering, taking meetings too early is usually more distracting than helpful - for both you and your team. Engaging too early can force you to define your story before it’s actually clear, and worse, it can pull your attention away from the real work of building product and closing early customers.
When you get inbound, it’s better to push back politely. One good way to respond is to say something like, “We’re fully focused on building product and closing early customers, let’s reconnect in a few months.” This keeps the door open while protecting your focus.
Always remember: it’s a VC’s job to reach out and build relationships. That doesn’t mean they’re serious about investing.
During this phase, be very intentional about your time. Founders consistently underestimate how draining and time-consuming these early conversations can be.
“You’re either fundraising, or you’re not. So don’t start the conversation before it’s time.”
– Quentin Nickmans, Partner and Cofounder of Hexa
Right before you start your roadshow
When you feel like fundraising is right around the corner, it is time to start war- ming up relationships with VCs, but not the time to begin your actual fundraising process.
Begin by reconnecting with investors who reached out earlier or who were introduced via highly credible, warm intros. Avoid cold outbound during this phase, it’s about building momentum quietly and setting the stage.
Treat these meetings as informal conversations, not pitches. Don’t share your deck or specific numbers. At this point, your equity story is still evolving. Instead, focus on telling your story with clarity. Remember that it’s ok to show ambition, but never exaggerate your traction. Your credibility is far more valuable than any boasting. Practice beforehand so you’re not winging it, first impressions are sticky, and you won’t get a second chance.
These early conversations are a great opportunity to test how VCs react to your story, and whether there’s genuine alignment. Most investors will be friendly and positive, they want to keep their options open but that doesn’t mean they’re truly interested. Be careful not to confuse vague enthusiasm with actual intent.
Look for signs of real interest. One powerful tactic is to ask for something, like a warm intro to a customer or advisor. Serious investors will lean in and show effort.
Finally, listen critically. Apply a “negative filter” to feedback. If a VC is vague, overly complimentary without follow-through, or avoids specifics, you can safely assume they’re not serious (at least not yet).
When it’s go-time, create momentum
While you may be tempted to pursue a preemptive round with minimal effort, this rarely succeeds. You need to commit to a full fundraising process. Because fundraising rounds don’t just happen, they’re intentionally engineered. The key is to create momentum and urgency.
Start by locking in a few early commitments from clients or business angels, this helps you build credibility and signals demand. Once you’ve got early inte- rest, compress the rest of your investor meetings into a tight 1 month window. This allows you to manage timing and create a sense of movement.
Set a clear public deadline for when you want to sign a term sheet. Then, push investors to do real work: ask for intros, reference checks, or customer calls. If they’re genuinely excited, they’ll engage quickly.
Negotiate with strategy, not emotion
Receiving a term sheet is a significant achievement but it also marks the be- ginning of a high-stakes negotiation that will influence your company’s control, economics, and investor relationships well into the future. The structure you establish in your first priced round often becomes the foundation for all subsequent financings. Yet many founders either rush through this stage or get caught up in the emotion of the moment.
Key principles for negotiating a term sheet:
Prioritize what truly matters. Not all terms carry equal weight. Focus on
the key economic terms (valuation, option pool) and control terms (board structure, protective provisions, drag-along). Don’t waste energy negotiating minor language details.
Understand the “market” terms but know where you can push. Investors will often present their term sheet as “standard.” While many elements are, others can vary. Know what’s market, and where you have leverage to nego- tiate. It is your lawyer’s role to make you understand everything.
Remember: you do have bargaining power. A common mistake is assuming that just because a term sheet comes from a prestigious or well-known VC, it must be taken as-is. That’s rarely the case. Founders have more room to negotiate than they often believe—especially when they’ve prepared well, have multiple conversations in motion, or show a clear command of their bu- siness. Investors expect some back-and-forth, and reasonable asks will not jeopardize the deal. If you engage a reputable law firm with strong venture capital experience they will help you adopt reasonable positions.
Don’t shy away from a detailed term sheet. A well-drafted, granular term sheet helps align expectations early and reduces ambiguity when it’s time to negotiate the long-form documents. It’s often the best way to avoid sur- prises later in the process.
Embrace a dual mindset during negotiations. As a founder, you’re wearing two hats: one advocating for your personal position, and the other acting in the long-term best interest of the company. It can feel schizophrenic at times, but striking that balance is critical. For example, pushing too hard for overly founder-friendly vesting terms might protect you individually, but it can send the wrong signal to investors and undermine confidence in the team’s long-term commitment. In some cases, what seems like a win for the founder can actually be detrimental to the company’s fundraising prospects and future governance.
Move quickly and keep the momentum. Fundraising is often about timing, and slow responses can cool investor interest. Promptly engaging on term sheet discussions and diligence requests signals professionalism and keeps the process moving toward closing.
Use your counsel strategically. Your legal team should be experienced in venture financings and should help you model scenarios, anticipate investor concerns, and protect your downside. But remember: your lawyer negotiates the how—you still set the tone and direction of the negotiation.
Don’t ignore the soft signals. A term sheet is not just about terms, it’s about who you’re going into business with. Pay close attention to how your inves- tor communicates, how they handle friction, and whether they approach negotiations collaboratively or aggressively. It’s a preview of your future boardroom dynamics.
Above all, remember that negotiating a term sheet isn’t about “winning”, it’s about setting up a relationship that supports your company’s long-term suc- cess.
Best practices to stay organized
From day 1, log every inbound VC and note the context.
Keep a Notion table or CRM to track who reached out, what was discussed, and when to follow up.
Take notes in each meeting, VCs will, and so should you.
Over time, develop your own VC fit criteria: Who felt aligned? Who made you feel heard?
To watch out for during fundraising
Before and during a fundraise, how you communicate with investors matters just as much as what you’re building. These aren’t just best practices, they’re rules that protect your credibility and long-term reputation.
VCs talk to each other
Don’t assume anything you say in a meeting stays private. VCs compare notes regularly, on founders, traction, competitors, and terms. If you say different things to different people, it will get out.
Don’t fake a term sheet or invent competitive pressure
Pretending you’ve received a term sheet or hinting at a bidding war when there isn’t one can backfire spectacularly. It’s easy for VCs to verify, and once they sense bluffing, you’ll lose all leverage and trust.
Never lie or overpromise
Avoid inflating your traction, pipeline, or product readiness. VCs are used to founders being optimistic, but if you cross the line into dishonesty, they’ll disengage. Worse, it can follow you for years.
Keep your story consistent
Whether you’re discussing valuation, revenue, team structure, or the cap table, your narrative needs to be aligned across all conversations. Inconsistencies raise red flags and make VCs question your reliability.
Post-raise: communicating with investors
Make your updates consistent
Once your round is closed, a new responsibility is keeping your investors informed.
The most important principle to follow is simple: always tell the truth. Investors understand ups and downs. What matters most is transparency and consistency, it’s how trust is built over time.
If you’re preparing monthly or quarterly investor updates, make sure to include the key metrics investors care about. These typically include revenue, user growth, and any significant milestones or accomplishments. Don’t just share the numbers but also provide context and analysis to help investors understand the story behind the data. What’s working? What’s changing? What challenges are on the horizon?
To save time and reduce the operational burden, it’s a good idea to send the same report to all your investors. Just make sure the level of detail and timing works for everyone. Consistency is key: avoid changing the format or message from one investor to another or quarter to quarter.
“The best way to manage investor relationships is with radical honesty. Send regular updates even when things aren’t going well. Especially then. It’s better to underpromise and overdeliver than the opposite. Over time,
it will build a huge amount of trust.”– Quentin Nickmans, Partner and Cofounder of Hexa
Here’s a template to follow:
Think about your next round
Closing your round is a huge milestone, but it’s also the starting line for the next phase. Fundraising is a continuous process, and the relationships you build now will shape your future rounds. Start thinking about your next raise early, track your milestones, stay in regular touch with potential future investors. By nurturing these relationships and maintaining momentum, you’ll be in a much stronger position when it’s time to raise again.
“Raising is a numbers game. You have to contact a lot of people, be everywhere, keep track, follow up. But it’s not just about volume, it’s also about timing and nurturing. One of the best things I did, although a bit too late, was starting to build relationships with the VCs for the next round. Tell them your goals early on:
’Here’s what we’re going to achieve in the next 6 months.’ Then come back in 6 months and say: ‘We did it.’ That makes a huge impression. The best founders are always planting seeds ahead of the next round.”
– Olivier Pailhes, cofounder of Aircall