The Myth of the Two Week Raise

In the world of startups and venture capital, tales of the fabled two-week fundraising have taken on an almost legendary status, capturing the imaginations of eager entrepreneurs and investors alike. We’ve all heard them and, probably, been guilty of spreading them. Yet, this narrative often glosses over a critical truth: the seemingly overnight successes are usually the product of twelve months, if not more, of preparation, networking, and strategic groundwork. The reality is that fundraising is a marathon disguised as a sprint.

As an investor at an Australian seed specialist fund, I have the privilege of interacting with a diverse array of entrepreneurs daily, many of whom aspire to secure funding from a venture capital fund. These interactions have given me a front-row seat to the realities of fundraising timelines, which often contrast sharply with the mythical two-week raise.

At Rampersand, our expertise lies in propelling startups from the Seed stage to a triumphant Series A round. As soon as we complete a Seed round with a startup, we actively collaborate with the founders to initiate engagement with potential investors for their next round. This doesn’t mean engaging immediately but identifying and planning engagement with suitable investors.

We are seeing fundraising rounds generally take 6 to 9 months from first engagement of an investor.

We’ll unravel the layers of this myth and explore both the advantages and pitfalls of engaging with investors early in your journey.

The VC will already have half-made the decision before the ‘official’ round

By initiating conversations early, you cultivate relationships wherein the VC can essentially become a silent partner in your journey, forming their investment thesis as they gain familiarity with your business. By the time you’re ready to officially open your round, these investors have had ample opportunity to assess your progress. In some cases, they might even catalyse the fundraising round themselves, prompted by their confidence in your growth trajectory and the strengths you’ve demonstrated as a founder. They may have even starting writing their investment thesis before your official raise (I’ve done this more than once).

Downside: It takes time to be always ready to pitch

While early engagement with VCs offers undeniable advantages, it is not without its drawbacks. Founders must be prepared for the significant commitment of time and energy that comes well before the actual fundraise. This means being in a perpetual state of readiness to pitch your vision, often while you are still in the trenches.

You must always be selling the vision, but you will already be doing this with employees and customers, so it’s more of a change of message than an on/off button.

You can leverage the VC’s knowledge and insights along the way

During this longer courtship, the learning curve can be exponential if you’re able to leverage the knowledge of investors you are engaging. Venture capitalists, with their wealth of experience, can provide you with invaluable insights into what constitutes a ‘good’ investment round, what metrics are most appropriate, and what pitfalls they have seen in similar companies. By tapping into their perspective, you can adjust your strategy to align with what investors are looking for, thereby increasing your chances of a successful raise, if they are indeed the type of investor that you want.

Downside: There is no such thing as a casual chat

Every interaction with a potential investor is an opportunity to sell your company’s potential, but this can be a double-edged sword. There’s rarely such a thing as a casual chat; conversations are de facto evaluations of your company’s trajectory. Founders will want to consistently demonstrate progress, as each meeting serves as a benchmark against which VCs measure growth and momentum. This pressure to present a continually upward trend can be taxing and may not always reflect the iterative, sometimes nonlinear path that startups typically navigate.

Progress doesn’t always mean ARR growth (although, that helps), it may be unlocking a feature that opens new customers, overcoming a blocker from a previous meeting,

You can ‘Reverse DD’ the investor

This period also allows for something we call ‘reverse due diligence.’ As much as VCs are evaluating your company’s potential, you, too, have the chance to assess them. Are they offering the support they promise? Is their advice actionable and impactful? Understanding the true colour of a VC’s support is pivotal — it ensures that when you do decide to raise capital, you’re partnering with investors who you know will add tangible value beyond just their financial contribution.

Downside: Without progress you run the risk of conversation fatigue

Maintaining a selling mode over an extended period also runs the risk of conversation fatigue — both for the founders, who must repeatedly articulate their vision, and for potential investors, who are regularly updated with new achievements and milestones. The challenge is to keep the narrative fresh and compelling, avoiding the pitfall of diminishing returns as the novelty of the startup’s story wanes over time.

You can save time (in the long run) by not continuing with investors who are not a match

Moreover, a year of interaction will undoubtedly separate the wheat from the chaff. Not all investors will resonate with your vision or approach, and that’s not only okay — it’s preferable to discern sooner rather than later. By gradually filtering out those who are not a good fit, you save precious time and resources during the actual fundraising. During the whirlwind two weeks you can concentrate your efforts on the most promising prospects, those who have shown a genuine interest, who have genuinely helped you along the way, and whose investment ethos aligns with your company’s trajectory.

There will always be exceptions

Despite the general wisdom advocating for early engagement with VCs, it’s important to acknowledge that there are always outliers. Some intrepid founders manage to defy the odds and secure funding rapidly. While these instances are noteworthy, they are the exception rather than the rule, often benefiting from a combination of exceptional circumstances such as urgent market opportunities, previous relationships, or riding the crest of a trending sector.

However, it’s worth considering the depth of the relationship that can be formed in such a short timeframe. A two-week fundraising sprint leaves little room for building the kind of understanding and partnership that typically develops over months of interaction.

Despite these challenges, the strategic importance of early engagement often outweighs the downsides, provided founders approach the process with open eyes. Acknowledging the extra work, the continuous need to sell, and the importance of managing investor relationships carefully can prepare startups for the intense scrutiny of the fundraising process. When done effectively, it ensures that when the time comes, both founders and VCs are ready to move swiftly towards a fruitful partnership.

Written by Chris Quirk

You can connect with me here: LinkedIn