17 Things Entrepreneurs Need to Know about Fundraising

Money, money, money. It’s a popular topic, especially amongst entrepreneurs that are out looking for funding for their startup. After talking to hundreds of entrepreneurs, personally trying to raising money several times, and investing in dozens of startups (directly through Atlanta Ventures and Shotput Ventures) I’ve learned 17 things entrepreneurs need to know when fundraising:

  1. Recognize the metrics required to raise a Series A
  2. Fewer entrepreneurs raise Series A rounds than people win million dollar lotteries each year
  3. Raising angel money is very different from venture money
  4. Answer these 8 metrics questions to raise a Series A
  5. For every 1,000 venture-backed startups, less than 20 sell for $100 million or more
  6. Remember that the value multiplier to raise money is 5x
  7. Ensure that it’s a 10x business model
  8. Know that terms are just as important as valuation
  9. Think IPO roadshow when raising a venture round
  10. Determine the desired percentage of the company to sell
  11. Raising money doesn’t equal product/market fit
  12. Add 10 – 15% more dilution to each round
  13. Make the funding last 18 months
  14. Build investor relationships well before they are needed
  15. Valuations are higher at launch before limited metrics are available
  16. Fundraising is a full-time job
  17. Create a competitive fundraising process

Finally, entrepreneurs need to know that raising money isn’t a given. Many try, most fail. Follow these 17 pieces of advice and better understand the fundraising process.

What else? What are some more things entrepreneurs need to know about fundraising?

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