How long on average did it take you to raise funds?

[kinggeorge]

@daisym Took me 3 months, focus on value and traction.

 

[whereheis]

@daisym All three times, it took about 2 months to close and get funds. Two were pre-product literally nothing built. One we had some basic code up running our own money (that one was a finance play). Twice I had the term sheet before we were incroporated.

If you build your network right, have the right co-founders and the space you are targetting is on message with current VC trends, and you know how to present yourself to the VC world, $3m seed rounds can be done VERY fast. And honestly if you can't do them fast, you probably shouldn't be raising.

They take progressively longer after that if you are looking for new outside investors. Series C with a company that was just scratching $60m rev but growth was only 15% took me about a year of suffering.

 

[anotherblowhard]

@whereheis When was your most recent raise? I’m willing to bet that if you were doing your first raise now pre-product, you’d be incredibly lucky f you could close, let alone closing in 2 months.

 

[whereheis]

@anotherblowhard Last time was admittedly 2015.

However i have several friends and acquaintances who did their first raise in the last 18months, several pre product. Also I invested in a few.

But it's all about your network and your work history.

 

[marky1]

@whereheis But remember…if you are pre product and have a vc on board…they also take equity before you’ve had a chance to properly determine your value…you have bosses right away

 

[whereheis]

@marky1 The VCs I've worked with are generally super hands off. Most good VCs are.

As to the dilution, its all about risk/reward, and I generally lean towards increasing the probability of exit versus maximizing return on a lower probability. I'm perfectly happy with two 8 figure exits I achieved this way. Yeah maybe I'd have another $10m if optimized my financing better, but that would have taken time/effoort and lowered the probability of an exit.

 

[john9820]

@daisym historically from my experience, if you gonna have advisor, the full process should take anywhere from 6 - 9 months. Depending on industry and luck. In case you are looking for an advisor, i would decide depending on your geographical location, if CEE then big4 has strong foothold in M&A. if western europe or US I would go for investment banks or small boutiques. In case you don't have budget I would find someone small, with industry experience - this can go a long way in your process. In case you have any questions - dm me. Me and my friend have our own startup helping out with these things. We have free consultation option in case you would like to discuss your situation.

 

[thomasmagda47]

@daisym Pre-seed is hard - and especially in Canada.

I'm in biotech/deeptech, so a pretty niche market for investors. We raised a friends and family round of $65k USD to get the company off the ground. That took about 4 months from start to finish. Once that was done, I started on the pre-seed round, which took 8 months to get to a term sheet, and then another 3 months to close the first tranche. (I wasted a about 4 months trying to get funding from VC's, which wasn't useful. All of our funding came from Angel investors.) It took two more tranches (and another 6 months) to get to the total $1.5M (oversubscribed) USD.

Fundraising takes a LOT of time and is really really hard. The only reason I was able to move so quickly in that round was because I'm a second time founder and my first company has become almost an anchor company in the province, which made my story somewhat believable. (whether I had anything to do with that success is debatable, but I learned a lot from it.). Watching others fund raise makes me realize how fortunate I am to be in the position I am.

A few lessons worth sharing:

* Canadian investors will not touch a SAFE. It's a non-starter.

* VC's in Canada probably won't touch you with a 39 and a half foot pole. In my field, VC's are 100% risk averse, and really aren't interested in pre-seed companies unless you already had a decade of data prior to starting your company. They're nice people and will give you great feedback, so start talking to them, but they won't fund you until they are guaranteed success. Their job is to find something that's already working and then invest in it to make it massive. Ideas and pre-seed rarely fit that description.

* Canadian investors want a deal on valuation. American companies get 2x valuations of Canadian companies, which enables them to hire top talent and grow faster. You will need to be MUCH scrappier because you won't be able to raise the same amount of money.

I'm currently fund raising right now, and it's moving significantly faster, but that's because we used the funds to solve a number of major technical issues that have plagued my industry for the last 40 years, and we have solid interest from all of the major players in the field... and yet our valuation is still under $10M USD. Welcome to Canada.