The Big F of Startup Life: Fundraising

Every founder I have ever coached on fundraising has, at some point, looked at me and said some version of the same thing: 

"I had no idea it would be this hard."

Not the first time. Not the fifth time. Not even for founders who have done it before and know exactly what is coming. Fundraising is one of those things that looks clean and logical from the outside and feels chaotic and deeply personal from the inside. The TechCrunch announcement is the last paragraph of a very long story.

I have been on both sides of the table — coaching founders through the process and sitting with venture investors evaluating decks. What strikes me most is not how different those two perspectives are. It is how much founders go into this underprepared, not because they are not smart, but because the honest version of fundraising is rarely the version that gets written about.

So this week I wanted to write about what I am actually seeing on the ground — the trends, the biases, the realities, the unwritten rules — as someone who sits both as a Venture Partner and as a coach and advisor to founders who are navigating one of the hardest things they will ever do in their professional lives: raising money to build something from the ground up.

Before Fundraising: Understand What You Are Actually Doing

Fundraising is a sales process with a very particular buyer, a very long cycle, and a very high rejection rate. The average venture capital firm receives thousands of pitches a year and funds somewhere between ten and thirty. In Q1 2025 alone, pre-seed investment in the US peaked at $1.2 billion — and the competition for that capital is fierce.

Fundraising is not a prize you get handed for having a good idea. Contrary to a common misperception, the best idea in the room does not automatically get funded. The founder who closes the round is usually the one who treated the process like a job — tracked conversations, followed up consistently, refined the pitch after every no, and kept going long after it stopped feeling fun.

The Fundraising Landscape Right Now

Global venture funding in 2025 was on pace to be the biggest year since 2021. Q1 alone hit $113 billion globally.

Here is the part that does not make it into the announcements: close to 60% of all that capital went to just 629 companies raising rounds of $100 million or more. A handful of AI mega-rounds are doing a lot of heavy lifting on that headline number. For everyone else, the bar has moved. What used to get you a seed round now barely gets you a first meeting. Investors want traction, capital efficiency, and a clear path to the next milestone — and you should expect to pitch anywhere from 100 to 200 investors before you close.

That is not meant to discourage you. It is meant to make sure you go in with accurate expectations, not the ones shaped by the announcements in your LinkedIn feed.

Fundraising or Bootstrap? The Real Answer Is: It Depends.

I am not going to tell you one is better than the other. They are different tools for different situations. Before you decide which path to take, it is worth spending real time understanding what your business actually needs to grow and what you are willing to trade in order to get there.

Venture capital is appropriate when your business genuinely requires significant capital before it can generate revenue — think deep tech, hardware, biotech, or marketplace businesses that need liquidity on both sides before they work. It is also appropriate when your market window is narrow and speed is the variable that determines who wins. Funding buys speed. Speed can be the difference between being the company everyone has heard of and being a footnote in someone else's story.

Bootstrapping is appropriate when your business can fund itself through early customer revenue, when you want to maintain full control, or when the growth does not require the kind of velocity that VC demands in return. Many excellent businesses — including most consulting and service-based businesses — have been built to significant revenue without a single outside investor. This path is often a cleaner one, though might not benefit from the speed that can be generated by the 'spend to grow' approach. 

The choice is also rarely just VC or bootstrap. There is a whole spectrum in between, and it is worth knowing what is on it.

Angel investors are often the right first step for founders who need some capital but are not yet at the stage or scale that institutional funds are looking for. The right angel is not just a check — it is a former founder, a domain expert, or a senior operator who has been through what you are going through and can open doors you do not even know exist. Not all angels are created equal. A $25K cheque from someone with deep network and genuine operator experience in your space is worth more than ten times that from someone who just wants a piece of the action.

Revenue-based financing sits neatly between debt and equity — you repay investors as a percentage of revenue rather than giving up a permanent slice of your company. It works well for businesses with predictable recurring revenue and is genuinely underused by founders who assume the only options are bootstrap or institutional VC.

Grants and government funding are the most underused tool in the founder toolkit, especially in Europe. Enterprise Ireland, Innovate UK, Horizon Europe, the SBIR program in the US — these programs exist specifically to fund early-stage ventures, and they are non-dilutive, meaning you keep your equity. They take longer and involve more paperwork than a VC process, but they are real money and they signal credibility. Do not dismiss them because they feel less glamorous than a Series A announcement.

Debt financing — through banks, revenue-based lenders, or venture debt — is worth understanding, particularly for businesses with assets or predictable cash flows. It is not the right tool for every stage but for the right business at the right moment it preserves equity while funding growth.

The question to sit with honestly is: what kind of business am I actually building, and what does it genuinely need to get to the next meaningful stage?

Does Location Still Matter?

Yes. More than founders want to believe, and less than it used to.

The Bay Area, New York, Boston, Los Angeles, and Washington D.C. are still the five cities with the most pre-seed capital in the US. The concentration of investors, talent, and infrastructure in those places is real. Being there increases your surface area for the warm introductions that actually get deals done.

At the same time, European venture funding reached $17.6 billion in Q1 2026, up nearly 30% year over year. Singapore, Dubai, Berlin, London, and Tel Aviv are mature, well-funded ecosystems. The world has opened up. Many seed-stage funds now invest globally and are happy to meet on a call.

What geography cannot replace is relationships. If you are building from a smaller ecosystem, you simply need to work harder to get in front of the right people. Which brings us to the thing that has always been true and will remain true regardless of what the market does.

Relationships: More Important Than Your Deck when Fundraising

The cold pitch — sending your deck to a fund with no prior introduction — has a success rate somewhere between very low and essentially zero at most established funds. Partners at institutional funds are managing existing portfolios, sourcing from their networks, and wading through inbound requests. An email from someone they have never met is rarely where the yes comes from.

Founders who raise successfully build investor relationships early. Early means months or years before you actually need the money. The founder who closes a round in March often started that investor relationship the previous September — sharing updates, having informal conversations, getting feedback on their thinking before it was a formal pitch.

This is the advice that feels frustrating to hear when you need capital now. But it is true. Map your network before you launch a process. Every founder who has raised before you, every angel in your orbit, every operator who has touched a fund — these are your warm introduction paths. Use them.

Accelerators like Y Combinator, Techstars, and their regional equivalents exist largely to shortcut this. They provide credibility by association and access to investor networks that would take years to build independently. If you are pre-traction and pre-network, a respected accelerator is often the most efficient on-ramp.

The Bias Problem While Fundraising

I am going to say this plainly because I think too much fundraising content either skips it entirely or mentions it once and moves on.

If you are a woman raising capital, you are operating in a system that was not designed for you and has not changed fast enough.

In 2024, female-only founding teams received 2.3% of global venture capital — $6.7 billion out of $289 billion total. All-male teams received 83.6%. In the US specifically, female-only teams received 1% of total funding.

Now here is the part that makes even less sense: women-founded companies generate 78 cents of revenue per dollar invested; male-founded companies generate 31 cents. The returns are there. The capital allocation is not. The math does not work, and investors are leaving money on the table because of it.

The dynamics in the room are well documented. 

1. Female founders are asked prevention questions — focused on risk and loss — 2.3 times more often than male founders, who receive promotion questions about growth and potential. 

2. Women are interrupted 4.7 times more frequently during pitch presentations.

3. Female founders spend an average of 7.4 months fundraising versus 5.2 months for male counterparts — for the same outcome.

Knowing this will not make the bias disappear. But it will stop you from internalizing it as a reflection of your company's value, which is what the environment is designed to make you do. When an investor pivots to risk questions, you address the concern and redirect to the growth case. You do not shrink the vision to fit what you think they will fund. You build the pipeline of investors who are actually looking for what you are building.

The same structural problem exists, with different dimensions, for founders of color. Black founders received just 0.4% of US startup funding in 2024. The system here is bigger than any individual can fix alone — but knowing it exists changes how you build your investor pipeline, which communities you invest your time in, and which funds have actual track records versus the ones with a diversity page on their website and a homogeneous portfolio.

What Your Pitch Deck Actually Needs to Do for Effective Fundraising

A pitch deck is not a document. It is a conversation starter. Its job is to get you into a room, not to close a deal.

Investors read decks in minutes, often on their phones, often while doing something else. The deck that works is the one that makes someone think: 'I want to talk to these founders.' That is the only job.

After reviewing many decks on both sides of the table, here is what I think matters:

1. The problem has to be felt. Not theoretically large. Viscerally obvious. If the reader has to work to understand why this problem exists, you have already lost them.

2. Before any of this: can you tell the story in sixty seconds? This is where most founders lose the room before they even realize it. I sit in pitches and watch founders spend the first ten minutes explaining the architecture of their solution before they have told me what problem they are solving or why anyone should care. By the time they get to the interesting part, I am already half gone. Not because I am not paying attention — because you have not given me a reason to.

The most important skill in fundraising is not financial modeling or slide design. It is the ability to make someone understand what you do and why it matters in the time it takes to ride one floor in an elevator. If you cannot do that, the deck is the least of your problems.

Steve Jobs did not say "Apple has developed a revolutionary new portable music device with 5GB of storage and an intuitive click-wheel interface." He said: "1,000 songs in your pocket." That is a story. It tells you the problem (my music is not with me), the solution (now it is), and the scale of the thing (all of it, in your pocket) in five words. You could not forget it if you tried.

Your pitch needs a version of that sentence. Not a tagline. Not a mission statement. A sentence that makes the person sitting across from you immediately think: I know someone who needs exactly this.

The mistake founders make is believing that complexity signals credibility. It does not. It signals that you have not done the hard work of figuring out what your business actually is at its core. Investors have seen thousands of pitches. The ones that stay with them are the ones they can repeat to a colleague in the corridor afterward. If they cannot do that, you have not made the cut.

This also means resisting the urge to be everything to everyone. The founder who tells me their product helps individuals, teams, enterprises, nonprofits, and governments simultaneously has not made a positioning decision yet. They have made a list. If you are everything to everyone, you are the obvious choice for no one. Pick one. Say it clearly. The rest can come later.

A useful test: hand your pitch to someone who knows nothing about your industry and ask them what your company does. If their answer is vague, circular, or longer than two sentences, you have work to do before you are in front of investors.

3. The team is the bet at early stage. Before significant traction exists, investors are largely betting on whether you are the right people for this specific problem. Your relevant experience, your unfair insight, why you and not someone else — this needs to be clear and specific, not a list of impressive logos.

4. Traction is expected earlier than it used to be. Even at pre-seed, investors want some evidence that real people have engaged with what you are building. Revenue, active pilot customers, letters of intent, a waitlist with real conversion data — something that exists in the world, not just the deck.

5. The numbers need to be honest. Projections that go straight up and to the right with no explanation of the underlying assumptions will undermine your credibility faster than almost anything else. Show that you understand the mechanics of your own business.

6. One clear ask. How much, what for, and what milestone does it get you to? If those three questions are not answered clearly in the deck, something needs reworking.

Why You Cannot Get Traction

Traction is the word investors use and the thing founders struggle with most. When founders tell me they cannot get traction, here is what I usually find:

1. They have not talked to enough real customers. The number that starts to reveal a pattern is closer to fifty conversations than five. Most founders stop at fifteen because the early conversations are uncomfortable and inconclusive, and they talk themselves into thinking they have enough data. 

   
   

2. They are solving a problem people have but not a problem people will pay to solve. Someone nodding enthusiastically in a discovery call does not equal someone putting a credit card in. These are different behaviors and only one of them is traction.

   
   

3. The positioning is too broad to be the obvious answer for anyone. "We help companies improve productivity" is a description, not a positioning. Who specifically? What outcome specifically? The narrower and more specific you get, the faster traction comes — because you become someone's clear first choice instead of everyone's vague second option.

   
   

4. They launched before they had a repeatable motion. One customer is a data point. Five customers from the same channel with the same pain and the same conversion path is the beginning of something investors can see.

Do You Have to Prove Scalability?

At seed stage, you do not need to have proven it. You need to tell a credible story about how it happens.

What investors are actually asking when they ask about scalability is: can this become a business large enough to return the fund? For a $100M fund, that typically means believing your company could be worth $500M or more at exit. That shapes what they fund.

A services business, a niche product with a deliberately small addressable market — these may be excellent businesses but they will struggle to generate institutional VC interest. Not because they are bad businesses. Because the return profile does not fit the model.

Understanding this before you walk into the room saves everyone time, including yours.

What does tell a credible scalability story: unit economics that improve with volume, a product that does not require linear headcount to grow with it, a distribution strategy that can reach customers without a one-to-one sales effort for every single one, and a market that is genuinely large enough that even a small share is a significant number.

The Reality of the Fundraising Process

Here is what fundraising actually looks like for most founders:

1. You will spend more time on it than you planned. 

2. You will get meetings that feel promising and then go completely silent. 

3. You will receive feedback from different investors that directly contradicts itself. 

4. You will revise your deck more times than you want to count.

5. There will be a week where three investors pass in the same forty-eight hours and you will question every decision you have made since deciding to build this thing.

6. And then something will click. 

7. An introduction lands differently. 

8. A conversation goes somewhere unexpected. 

9. An investor asks to see your data room. And looking back, you will see that the process was also a filter — finding the investors who actually understand what you are building, not just the ones who were available.

Founders who raise successfully treat fundraising as a structured process, not an ad hoc activity. That means running it like a sales pipeline. Tracking conversations. Following up consistently. Creating genuine momentum by getting multiple investors interested at the same time, so you are not negotiating from a position of desperation — which investors can smell from across the table.

FAQ: What Founders Ask Me

Should I raise or bootstrap? Both are valid. The question is whether your business genuinely needs outside capital to reach the next stage, and whether the terms of that capital are ones you can build under. Understand the trade-offs before you decide, not after.

VC or angels? Angels first, often. They move faster, take earlier risk, and the right angel brings more than capital. A former founder who has done what you are trying to do and can open three key doors is worth more than the institutional term sheet that arrives six months later with heavier terms.

Does location matter? Yes, for access to warm introductions and density of investor relationships. Less than it used to for actually closing a deal, given that many funds now invest globally.

Do relationships matter? They are the single most important variable in getting a first meeting. Build them before you need them.

Is there bias against women and underrepresented founders? Yes. Documented, persistent, and backed by data. Knowing it exists helps you navigate it, build the right investor pipeline, and stop interpreting structural bias as personal failure.

What is the most important thing in my pitch? At early stage: the team and the problem, in that order. Before significant traction, you are asking investors to bet on you as founders. Make the case for why you are the right people for this specific problem.

Why can't I get traction? Usually: not enough customer conversations, solving a pain that exists but people will not pay for, or positioning too broad to be the obvious choice for anyone specific.

How many investors should I pitch? More than you think. Be prepared to pitch 100 to 200. Run it as a process.

What about grants? Seriously underused, especially in Europe. Enterprise Ireland, Innovate UK, Horizon Europe, SBIR in the US — non-dilutive capital that takes more time but costs you nothing in equity. Worth every hour of the paperwork.

Are service based businesses fundable by VCs? Rarely (though it does happen), because the scalability story is structurally harder to tell. But angels, revenue-based financing, and strategic investors are all real options. And many service-based businesses do not need external funding at all — they need clients, a repeatable sales motion, and the patience to let the compounding work.

A Few Stories Worth Knowing

When the silence after a pitch stretches into weeks, it helps to have some reference points that are not the polished LinkedIn announcement version.

LinkedIn launched in May 2003 with almost nobody on it. On some days, fewer than 20 people signed up. Reid Hoffman had already been a successful PayPal executive, and he still pitched dozens of VC firms and faced real skepticism — including one partnership where a vocal group of partners thought consumer internet was "a massive waste of time and money." He eventually closed a $4.7M Series A with Sequoia, who showed up late in the process and moved fast. The product barely had any revenue. The tipping point came later, quietly, through an address book upload feature that nobody announced as a milestone. And then it was everywhere. Microsoft acquired LinkedIn in 2016 for $26.2 billion. The point is not the exit number. It is that the tipping point is almost never visible from where you are standing.

Melanie Perkins was rejected by more than 100 investors before Canva got its first check. She had the idea in 2007, spent years building a proof-of-concept in the form of a school yearbook tool, flew from Perth, Australia to San Francisco to pitch, and heard no more than a hundred times. Some investors dismissed the geography. Others could not see why non-designers would need a design tool when professionals already had Photoshop. One early investor's Silicon Valley peers called it a "Wesley head-scratcher." She learned to kitesurf — specifically because a prominent VC she needed to meet organized events around the sport. Canva launched in 2013 and had 150,000 active users within its first year. It is now valued at $65 billion and profitable every year since 2017. Perkins later said: "You have to believe in yourself and your vision for a very long time before anyone else will." Worth sitting with if you are on rejection number forty.

Sara Blakely built Spanx from $5,000 of her own savings and did not take outside investment for over twenty years. Manufacturers turned her away. Investors did not understand the product. She personally drove to department stores and stood in the hosiery aisle to watch women react to her product on the shelf. She bootstrapped for 21 years before selling a majority stake to Blackstone in 2021 at a $1.2 billion valuation, on her own terms, without ever having answered to a board. The lesson here is not that you should never raise. It is that not raising is also a strategy, and sometimes it is the one that keeps you in control of what you are building long enough to see it become something.

Whitney Wolfe Herd launched Bumble in 2014 after a very public and painful exit from Tinder. The dating app market was already crowded and dominated by platforms with powerful network effects. She launched anyway, with one structural change — women make the first move — and built a company that went public in 2021 at an $8.6 billion valuation, making her the youngest female CEO to take a company public. The idea that there was no room for a new player in an established market did not hold up. It rarely does when the new player brings something structurally different.

Brian Chesky, Joe Gebbia, and Nathan Blecharczyk could not pay rent. That is genuinely where Airbnb started — two designers and an engineer in a San Francisco apartment in 2007, air mattresses on the floor, a design conference in town with no hotel rooms left. They charged $80 a night and had three guests. Then they tried to build a business out of that idea, and almost nobody believed them. Investors dismissed the concept of strangers paying to sleep in other strangers' homes as unorthodox at best, dangerous at worst. They were also two designers, which in Silicon Valley at the time was practically disqualifying — as Chesky later put it, investors "thought we just made things pretty."

They accumulated $20,000 in credit card debt. They ate cereal for dinner — specifically, the leftover "Cap'n McCain's" novelty cereal boxes they had designed and failed to fully sell. The cereal is worth explaining: out of money and out of ideas for how to stay alive, they hand-glued 500-odd limited-edition Obama O's and Cap'n McCain's breakfast cereal boxes in their apartment and sold them for $40 each at the 2008 Democratic National Convention. They raised $30,000 that way. Which was enough to get the attention of Paul Graham at Y Combinator, who later said that the cereal told him everything he needed to know — if they could convince people to buy $40 election cereal, maybe they could convince people to sleep in strangers' homes. They got into YC, then got a $600,000 seed round from Sequoia, then a $7.2 million Series A. Airbnb went public in December 2020 and the stock rose 113% on the first day. The company has now facilitated over a billion guest stays.

The cereal is a good story. But the real story is that the idea was right, the timing was right, and three people who had no reason to keep going kept going anyway — through rejection, credit card debt, and a lot of leftover McCain cereal.

These are not motivational stories in the generic sense. They are data points. The pattern in all of them is the same: the tipping point came after a period that looked, from inside it, like it was not working. The founders who got there were not the ones who had an easier path. They were the ones who stayed in the process long enough to find the people who understood what they were building.

One Last Thing

I have seen founders close rounds with decks that were rough. I have also seen polished decks go nowhere because the relationship was absent, the timing was off, or the market was not ready for what they were building.

Fundraising has many variables you cannot control. The ones you can control are your preparation, your relationships, your self-awareness in the room, and how you carry yourself across what is almost always a longer timeline than you expected.

Get those right. Then trust the process.

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Merve Kagitci Hokamp is an ICF and EMCC accredited executive coach, LEGO® Serious Play® certified facilitator, and the founder of Leadrise Coaching & Consulting. She spent 11 years at Google across ad sales, partnerships, Cloud, and data divisions, holds an INSEAD MBA, and works with founders, senior executives, and leadership teams across 40+ countries.

merve@leadrisecoaching.com | www.leadrisecoaching.com | LinkedIn

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