Fundraising Techniques For Startups

Venture-backed founders: you really are signing up for a decade. Here's some new data on the time (in years) from the day of incorporation to various funding milestones for software startups. Yes, I know funding milestones aren't everything. But if you're on the venture path then they matter - and speed is a major aspect of the VC growth model. Chart below shows time to primary round (no funny business with bridges or extensions) and is filtered to just software companies (hardware / biotech plays at different timescales). 𝗦𝗲𝗲𝗱 (𝗶𝗻𝗰𝗹𝘂𝗱𝗲𝘀 𝗽𝗿𝗶𝗰𝗲𝗱 𝘀𝗲𝗲𝗱 𝗿𝗼𝘂𝗻𝗱𝘀 & 𝗦𝗔𝗙𝗘𝘀 𝗼𝘃𝗲𝗿 $𝟮𝗠) • Median of 1.8 years from incorporation recently • Up 15% or so from 2019 𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 • Median: 3.1 years from incorp • Up a gentle 10% from 2019 𝗦𝗲𝗿𝗶𝗲𝘀 𝗕 • Median: 4.7 years from incorp, 16% higher than 2019 𝗦𝗲𝗿𝗶𝗲𝘀 𝗖 • Median: 6 years from incorp (and down a little from 2023? Odd.) 𝗦𝗲𝗿𝗶𝗲𝘀 𝗗 • Median bounced all the way to 8.1 years from incorporation So what stands out from this data? Couple points to me. First, obviously companies in the venture ecosystem are staying private longer. We didn't show it in the chart but you can get medians up to 12 years or even higher for Series E, F, etc. Second - founders are definitely skipping stages. The round names are taken from the term sheets themselves, but there's no reason a founder has to hit every funding milestone. Get a seed, make amazing progress, boom jump up to a Series B. Third - damn that's a long time! The "cofounder as marriage" analogy hits hard. Build with the right people 🙏 What else would you want us to analyze through the lens of incorporation timelines? Open to new ideas in the comments! #cartadata #startups #fundraising #founders #venturecapital -------------------- Data on idea stage startups through pre-IPO — new insights out every Thursday morning. Subscribe to the Data Minute at the URL in graphic for your copy!

Please STOP chasing funding without a plan. I see too many founders with big dreams but no fundamentals. If you want to raise capital, do this at each stage: 1. Pre-Seed: Focus on developing your MVP and proving technical feasibility 2. Seed: Validate product-market fit and establish early traction 3. Series A: Implement a scalable go-to-market strategy and grow your customer base 4. Series B: Expand your addressable market and optimize operations For example: → Conduct user testing to refine your MVP → Survey customers to identify key pain points → Hire experienced sales leaders to scale revenue → Invest in infrastructure to support rapid growth You will build a fundable startup by methodically decreasing risk at each stage rather than just chasing the next round. Do that consistently and watch your valuation soar. -- ♻️ Found this helpful? Repost it so your network can learn from it, too. And follow me, Chris Tottman, for more content like this. #BrainDumps 🧠 💩 // Brain Dump #40

₹77,080 Crores allocated by the Government of India for startups and manufacturing in 2025. Yet most founders are still chasing VC money. I work with startups daily, and it surprises me how many don't even know these schemes exist. Here's what's available right now The Big Picture: → Deep Tech & Startup Fund: ₹30,000 Cr → MSME Budget Outlay: ₹23,168 Cr → Startup India Fund of Funds: ₹10,000 Cr → PLI Electronics & IT: ₹9,000 Cr → PLI Auto Components: ₹2,819 Cr → PLI Textiles: ₹1,148 Cr → Startup India Seed Fund: ₹945 Cr This is just the major allocations - there's more buried in smaller schemes. Let me break down what you can actually access based on your stage [1] For Early Stage Startups: 👉🏼 Startup India Seed Fund: Up to ₹50L per startup 👉🏼 SAMRIDH Scheme: Up to ₹40L grants 👉🏼 Atal Innovation Mission: Up to ₹15L for prototypes Most founders think these are too small. But remember, this is non-dilutive capital that can get you to revenue stage. [2] For Revenue Stage Companies: 👉🏼 CGTMSE: Up to ₹2 Cr collateral-free loans 👉🏼 Stand-Up India: ₹10L to ₹1 Cr for SC/ST/Women entrepreneurs 👉🏼 Multiplier Grants: Up to ₹10 Cr for R&D projects This is where it gets interesting. Revenue-stage companies have the best shot at accessing larger amounts. [3] For Manufacturing: 👉🏼 PLI schemes across 14+ sectors 👉🏼 Significant incentives for domestic production 👉🏼 Focus on electronics, auto, textiles If you're in manufacturing, you're literally sitting on a goldmine of incentives. The challenge? Most founders don't know how to navigate the application process. Here's where to start: - Startup India Portal [https://lnkd.in/gBdAH52D] - myScheme Portal [myscheme.gov.in] - SIDBI Portal [sidbi.in] - AIM Portal [aim.gov.in] - MeitY Startup Hub [msh.meity.gov.in] What you actually need: ✓ DPIIT registration for startups ✓ Proper documentation ✓ Clear business plan ✓ Compliance records ✓ Incubator partnerships (for some schemes) I've seen founders spend months preparing pitch decks for VCs, but won't spend a week getting their documentation ready for government schemes. The reality is Government funding is often cheaper, comes with less dilution, and has better terms than VC money. But it requires patience and proper documentation. #startupfunding #manufacturing #debtfunding

An early stage founder asked me today, "How often should I send investor updates?" My vote? Monthly! I've invested in over 60 startups, and I've noticed a strong correlation between consistent updates and success. A founder with strong investor communication skills is also likely doing the same thing with customers. Reasons to send a monthly investor update: - Stay top of mind. If your investors know of your progress and recent wins, they can surface opportunities for you. - It forces discipline. It keeps you tracking metrics like revenue, burn, runway. - Allows you to ask for help. If you include specific asks, you can activate your investors to "work for you." - Builds goodwill. Investors will take more risks to help you if they feel more connected. - Keeps everyone on the same page. Regular updates mean less one-off calls and communications with investors. 👇 Read on for an example template

Here’s the actual term sheet I signed when raising my $2M seed round — and what I wish more founders understood. It was late 2011. I was a first-time founder. No product. No revenue. Just a pitch deck… and a tourist visa. A name-brand US VC sent over this convertible note term sheet. After constant rejection in the UK, I was thrilled — and almost signed it blindly. Here’s what was in it: 💸 $4M valuation cap 📉 10% interest ⚠️ 3x liquidation preference 🧾 25% discount on the next round ⏳ 1-year maturity 🛑 No prepayment allowed 👀 Board-level access rights for a $100K note 🧨 MFN clause locking terms for 180 days 🎯 Post-maturity conversion at a board-set price Our (very expensive) lawyers told me it was a good deal. That I was lucky. But then I showed it to a second-time founder — and he called it out immediately: “These terms are full of landmines. You need to push back.” So I did. Reluctantly. And only on three things: 💸 Cap: $4M → $5M 📉 Interest: 10% → 8% ⚠️ Liquidation: 3x → 2x To my surprise, the VC agreed almost instantly. And I walked away thinking: I should’ve pushed harder. 💡 I’m sharing the actual (redacted) term sheet, with the most problematic clauses highlighted — so other founders can see what these deals really look like. All the other terms stayed in. It was too late to ask for more changes. And if my company hadn’t taken off like a rocketship, this document could’ve buried it. Fortunately, we raised a Series A shortly after and got rid of all the bad terms (you can do that when you have leverage). TLDR: Terms > Logos. Own your cap table. Ask the uncomfortable questions. Negotiate like your future depends on it — because it does.

After bootstrapping 3 startups, here are my 9 DOs and DON'Ts of building a team with very limited resources: 💸 DON'T: 1. Hire a dev shop to go from 0 to 1. Going from nothing to something requires a significant amount of time for trial and error and iterations. Whether the shop bills on time or milestones, values are misaligned with what you need to accomplish. 2. Hire the convenient person you can afford. It's tempting for bootstrapped startups to make an easy hire who's right there instead of the best person for the task. When you compromise on quality, you end up paying for it in some way by needing to do it again. 3. Expect marketing agencies can save you. Money can't buy product market fit. Most agencies are good at taking you from 1 to 2 when you already have a proven product/market, but paying an expensive retainer to test the market is a waste of time and money. 4. Bring on execs who have only worked in big companies. Big companies have trust, credibility, systems, resources, and support in place. Working for startups without those things require scrappiness and agility that people from corporate just don't have. 5. Paying with equity is more expensive. Equity is like toothpaste, once you squeeze it out of the tube, you won't be able to get it back in. If you think you'll sell your company for $10m, 1% is $100k. Do you the math and think thrice before inviting another shareholder. DO: 6. Have a tech lead on your side. I started eWebinar thinking I didn't need a CTO and that turned out to be the most expensive mistake I made. Not having someone on your side who's constantly thinking about how to build a better, scalable product is like having a restaurant without a chef. 7. Optimize burn with contractors. As a remote team, we let go of the idea that we have to hire locally. Which meant we can hire anywhere in the world based on skills, passion, and attitude. We don't have to fight for talent in the west, and can pay above market in the locations we hire in. 8. Pay people what they demand or more. To make sure people have the highest chance of success, they have to feel like they're not compromising. If you can't afford them, consider going fractional until you can. Working with fractional experts is a great way to test talent, build interest, and recruit them over time. 9. Hire the best person or none at all. The best person for the role will be at least 2x more productive than average while the worst person will make you 2x less productive. The quality of people on your team will exponentially increase your output. On S2E4 of ProfitLed Podcast, I talked about "Building a Founding Team with Limited Resources." Find it on your favorite podcast app. ___ I'm Melissa Kwan, Cofounder of eWebinar and Host of ProfitLed. 3x bootstrapper sharing stories & lessons weekly. Follow me + hit 🔔 to stay tuned.

₹50 LAKHS GRANT FOR STARTUPS - YET 99% ENTREPRENEURS MISS IT As someone who has built businesses both from scratch and with institutional support, I can tell you one thing: knowing how to raise funds is just as important as having a strong idea. Right now, the Indian government is offering up to ₹50 lakhs to early-stage startups under the Startup India Seed Fund Scheme (SISFS). This is not a loan. This is not equity. This is a pure grant. Yet, most startup founders I meet are either unaware of this or believe it’s too complicated to apply for. Here’s what every serious founder needs to know: 🔹 You don’t need a market-ready product. You can apply even if you're at the idea or MVP stage. 🔹 You must be an Indian citizen with a startup registered in India, under 10 years old, and working on a tech-first or innovation-first model. 🔹 You must not have received prior government funding under any other central scheme. 🔹 To apply, your startup needs DPIIT recognition (which is free and easy to get at startupindia.gov.in) 🔹 Once recognised, go to https://lnkd.in/g66vuPaf, choose three incubators, upload your pitch deck and necessary documents, and submit your application. As an entrepreneur, I’ve often seen amazing ideas collapse due to a lack of funds and access. What I’ve also seen is that those who invest time in understanding government systems and startup policies go a lot further than those who wait for VCs to knock on their door. If you're working on an idea that solves a real problem, don’t let the lack of capital hold you back. 🔹 Pitch clearly. 🔹 Show why your idea is innovative. 🔹 Prove that your team can build it. 🔹 Keep your documents and vision sorted. India has never been more startup-friendly than it is today. But this window will only benefit those who are proactive and informed. If you’re building, I strongly recommend exploring this scheme. Every founder should know this. Every startup should at least try. A good pitch can open a ₹50 lakh door. Sometimes, that’s all you need to go from idea to execution. Watch this space for more such insights. And if you're someone working on a strong idea, now is the time to build. #startupindia #founders #entrepreneurship #startupfunding #SISFS #governmentgrants #businessstrategy

'How do I calculate my valuation if I'm not generating revenue yet?' 🤷🏼♂ This is a question I often get asked by early-stage founders, and I understand why. Low valuations impact cap tables for future fundraising rounds; high valuations can put investors off or lead to 'down rounds' in the future. Here are two things to consider when thinking about a pre-seed or seed-stage valuation: 👉🏼 Cap table structure: Investors widely accept that active founding teams should have a minimum of 50% equity at the Series A stage. With this in mind, modelling the dilution of future investment rounds will help founders view how much dilution they can afford to take on each investment round. With a robust capital allocation plan, founders can take the target raise amount, apply a dilution range of 15% - 25%, and land on a rough valuation figure. 👉🏼 Exit potential: Calculating potential exit multiples in a specific sector or vertical can be done by researching enterprise value-to-revenue (EV/R) multiples. EV/R is a measure of the value of a stock that compares a company's enterprise value to its revenue. Understanding these multiples allows a founder to consider the exit potential of their start-up which, in turn, allows them to consider what equity holding an investor would need to achieve their target return (this varies greatly between investors). Pulling in some data here (shoutout to the king of insights, Peter Walker, for this beautiful graphic), to show the median equity amounts sold to investors by round. Valuations can be a friction point for investors and founders. Ultimately, both parties need to focus on value creation and supporting the other to achieve a mutually desirable outcome for the start-up. #founders #vc #startup #investment

Interconnected Risks: The Synergy Between Credit and Market Risks In the realm of banking and finance, risk management often involves a multitude of categories, each demanding its specific analytical tools and mitigation strategies. However, an understanding of the interconnected nature of these risks can provide a more comprehensive view, thereby enabling more effective decision-making. Among these, the synergy between credit and market risks stands as a pivotal example. Traditionally, credit risk and market risk have been treated as distinct domains within risk management frameworks. Credit risk focuses on the likelihood of a borrower defaulting on a loan, while market risk examines the potential impact of market variables such as interest rates, currency exchange rates, and equity prices. Although the analytical methods for these risks differ, they are far from mutually exclusive. A volatile market can have a cascading effect on credit risk. For instance, sharp declines in asset values can weaken a borrower's financial position, thereby increasing the probability of default. Similarly, a surge in interest rates could make loan repayments more difficult for borrowers, again amplifying credit risk. Thus, fluctuations in market variables should be incorporated into credit risk assessments to obtain a more accurate and realistic view. Conversely, an increase in credit defaults within an economy can affect market conditions. A spate of loan defaults can reduce investor confidence, leading to a potential decline in asset values. This cycle creates a feedback loop where credit risk and market risk perpetually influence each other, necessitating an integrated risk management approach. Technological advancements offer innovative methods for analysing and understanding this interconnectedness. Advanced risk modelling techniques, such as stress testing and scenario analysis, enable treasuries to simulate various market conditions and assess their impact on credit risk, and vice versa. However, the efficacy of these techniques is predicated on the availability of accurate and reliable data, reinforcing the essential role of data integrity. Financial regulations, too, are increasingly recognising the importance of this interplay. Regulatory frameworks such as Basel III include provisions for an integrated approach to managing credit and market risks, thereby acknowledging their interconnected nature. For bank treasuries, adapting to these regulatory shifts is not just prudent but also advantageous for maintaining a robust risk management framework. In summary, recognising the synergy between credit and market risks is not an optional exercise but an essential element of modern risk management. By adopting an integrated approach, bank treasuries can more accurately assess and mitigate risks, leading to better-informed decisions and stronger financial performance. #InterconnectedRisks #BankTreasury #CreditRisk #MarketRisk #IntegratedRiskManagement

I met two founders recently. No product, no revenue, but raising money at $40M valuation! They were super confident that they are building the Next Big Thing. And honestly, I love that energy. Every founder should believe they’ll defy the odds. But then we got into the details… The CEO said they were planning to raise $2 million for 5% of the company I asked, “Why do you think investors will agree to this?” The CEO said, “Because we’ll be worth $1 billion one day.” That’s where it fell apart for me. 🚩🚩 Confidence is great. But early stage valuation isn’t decided by dreams. It’s decided by how much money you need and how much equity investors expect. So I shared a simple framework with them to think about early stage valuations: 1. Raise for 18 months - 12 months to hit your milestones for the next fundraising round 3-6 months to close your next round 2. Calculate how much money you’ll need - Add up team salaries, product, marketing, and anything else you’ll spend money on for 18 months 3. Expect to give 10-20% equity - That’s the range most early stage investors will be looking for. Based on how much you’re raising, this will give you your valuation. For example: If you need $300K for 18 months and offer 15% equity, your valuation = $300K ÷ 15% = $2M Simple. Practical. Investor friendly. Because in the end, confidence sells the dream. But numbers close the deal. #HarshRealities