How to Raise Capital
What I wish I knew before my first investor pitch, and what every founder keeps asking me about raising VC funding.
The first time I sat across from a potential investor, I made every mistake in the book. Not many people know this but the first investor I ever pitched to was QED Co-founder Frank Rothman! He was patient, and he was awesome. I was lucky he gave me good advise. I talked too much about features, not enough about the problem. I answered questions I wasn't asked. I tried to sound impressive rather than honest.
Investors Think in Objections
Here's a mental model that changed everything for me: Investors start at “no.” Your job is to hand them enough proof to flip that switch to “yes.”
The better you do this, the higher your chances of getting a funded. Every interaction (a coffee, a pitch deck, a whats app) matters.
The investors who ultimately write checks aren't impressed by your certainty about everything. Instead, they gain conviction from your clarity on what truly matters (team, market, opportunity) and your honesty about where you need help.
It might sound obvious, but being in the "business of confidence" doesn’t mean you should be opaque or dishonest.
When you understand this, your conversations with investors become different. Instead of pretending you have answers to everything, be surgical about articulating two things: what you know very well, and what you don’t know yet, but have a clear plan to figure out, either through fundraising or ongoing work.
Don’t fundraise until you have to
Founders often believe they should meet investors "to build relationships," but doing that prematurely is a waste of time. Your energy should instead go toward building something meaningful that people love.
Meet investors only when it increases your odds of achieving your goal—such as finding a co-founder or deeply understanding your market. Otherwise, you're optimizing for the wrong thing.
Their job is knowing where to allocate capital by talking to as many founders as possible. Your job is talking to as many customers as possible and improving your intuition about what to build.
Fundraising Is Binary
Treat fundraising as an on-or-off switch. When you ask someone for money, you initiate a formal process. Always drive this process yourself.
Don't confuse relationship-building with fundraising! While relationships help, they don't guarantee the investor you've spent time cultivating will ultimately fund you...
Aim for Value, Not Just Money
Hard work gets you funded; leverage gets you funded by the right investors.
Initially, founders often believe their primary goal is capital. However, the best investors offer far more — networks, customer introductions, hiring support, credibility, and mentorship. To access investors who provide these advantages, you need strong signals like traction, customer growth, a compelling vision, or an exceptional team.
Leverage comes from building something meaningful and tackling genuinely difficult problems. Strong signals include a great team, market depth, customers, speed, honesty, character, and clear conviction.
The Mechanics
A list of many things of what founders ask often:
Your deck should cover: problem, solution, why now, why your team, and why this changes the space.
Format doesn't matter. Decks or memos—whatever works for you.
Treat it like a sales pipeline. Keep it tight with clear deadlines. Drive the process.
Any single "no" means nothing. Don't take it personally. Investors often say no without explaining why, keeping doors open just in case.
Be selective. Choose investors who complement your skills, knowledge, and share your values.
Early on, aim for alignment rather than diversity. You need a cult-like mindset from your team and investors. Diversity comes later; avoid personality conflicts at this stage
Target people, not firms. Fundraising is about relationships. These people will work with you for 5-10 years.
Seed vs. Multi-stage: Understand clearly what you need. The fund's objective should align with your stage, usually achieving PMF.
Get good lawyers. Some investors insert unusual, non-founder-friendly terms. Ensure you catch these early.
Don't waste time. Some investors take too long for too little value. Move on quickly.
Remember who helped. Keep a CRM tracking your fundraising interactions and introductions.
Create momentum. Speed is the secret to fundraising. Avoid the negative signal of lengthy fundraising periods.
Make it your full-time job.
Make it competitive.
Show commitment. Quit your day job. At least demonstrate you're willing to risk something making this venture reality.
The goal isn't impressing investors with how much you know. It's convincing them you'll figure out and that you're worth betting on while you do it.
Daniel