(Previous post - #2 in a series)
# 3: Be realistic with how long it takes to raise
If you don’t have a personal introduction to a Venture Capital firm or angel
group, then understand you won’t get a lot of phone calls immediately. Don’t
leave funding to the last minute.
I’ve heard more than one complaint from entrepreneurs about how long it takes
to get through the funding process. One of the reasons for this is that it
typically is a consensus-based process and this takes time. Usually, the larger
the number of individuals involved, the longer it takes. Investors in risky
ventures like to take time evaluating the company, the management and the market
space. They prefer to contact a variety of experts or other people whose opinion
they value. They will keep re-visiting the opportunity until it feels right
to them to write a check.
In my experience, entrepreneurs need to budget 4 - 6 months from beginning of
the funding search process to receiving money in the bank account. If any of
that time period falls during August or the end of year holiday season, add
another 1 to 2 months to your time estimate, since investors take vacations or
are otherwise unable to contact their network during that time.
It also helps to have a backup plan in case funding does not materialize.
Investors can smell desperation and they generally don’t like the smell, so be
prepared to patiently wait until the timing is right. Keeping investors who have
said “No for now” informed of your company’s progress is a great way to keep the
‘pilot light’ on and shows your determination and understanding of the