Ask a founder how long their raise will take and you will usually hear one month, maybe two, maybe three. Ask again four months in and the answer has changed.
Carlos Antequera, our co-founder and CEO, names the pattern this way: because founders are optimistic by nature, they tend to think it happens in the next month, two, three. On average, most fundraising processes run six to twelve months.
That optimism is what got the company built. It is also what turns a fundraise into a surprise. And the gap between expectation and reality is not random. It comes mostly from two things founders control: starting the process before the financials are ready, and spending months pitching capital providers whose criteria you were never going to meet.
Fix both before you start and the timeline compresses. Here is where the months actually go.
Start with the right mentality
Before the tactics, the frame.
Whoever gives you money is deploying either their own capital or capital from their investors. In the second case they carry a fiduciary responsibility to generate a return for their limited partners. That is the whole job. As Kristian Marquez, founder and CEO of FinStrat Management, frames it, investors are not doing due diligence to make your life difficult. They are simply executing on their fiduciary responsibility to their own investors.
Founders who internalize that bring a different level of maturity to every conversation. They stop reading questions as skepticism and start reading them as work that has to happen either way. They prepare the answers in advance instead of treating each request as an interruption. The process moves faster because they are not fighting it.
The same frame applies to silence. Founders often bemoan getting ghosted, and it is worth knowing that it is not personal. Traditional venture is still a very analog business. Despite all the productivity gains everyone is getting from AI, much of that work is still having conversations, and there are only so many hours in a day. That does not excuse a lack of response. It does explain it.
“If it feels like a slog, you’re in good company. It’s generally par for the course.”
You have to kiss a lot of frogs. Persistence is part of the job description.
Answer three questions before you pick an instrument
Founders often start with the instrument. Debt, equity, or both. That is the wrong starting point, because the instrument is the answer to a question most founders have not asked yet.
Carlos gives founders three questions to work through first.
What is your long term journey? No single fundraise is separate from your overall capital strategy. What you decide to do today affects what is available on the next round. You have to think about it holistically, and you have to decide what your race is, because it is your own.
“There’s no instrument that is good or bad in itself, but you have to see what is the right instrument for you at the right time.”
What milestone are you actually trying to hit? Founders tell us they are raising $3 million. When we ask what that gets them, they describe how they will spend the money, which is a different question entirely.
The milestone determines the amount. Once you name the thing the company has to reach, the number tends to size itself, and it is frequently smaller than where you started. It might be a million in the near term. It might be less. Raising past the milestone is not free optionality. You pay for it in ownership or in obligations.
What are your real options? This is the one that saves the most time. If you are not growing at the pace venture investors require, running a venture process will consume months and produce frustration. Carlos calls this being intellectually honest: if you are not at a super high growth moment, venture equity is probably not in the cards for you at this point in time. It does not mean you do not get there later.
“Just be realistic with where you’re at and what your true options are.”
That question got sharper over the last year. Kristian pointed out that it once took a software company roughly a decade to reach $100 million in ARR. It took HubSpot ten years. Today some companies are doing it in a fifth or a sixth of that time, partly because founders can iterate faster and find product market fit sooner. The bar for equity moved with it. What used to make a credible Series A, two or three million in ARR, is now closer to five to seven million at many firms, and seed expectations have moved up alongside it. If you were forecasting a round in the next three months and your metrics are not there, the plan to rethink is the capital plan, and possibly the burn.
The homework that saves you months
There are more than a thousand VCs in the US, plus angels, plus dozens of lenders. They do not run the same playbook. Some tell their own investors explicitly that they are not swinging for the fences: they want singles and doubles. Others invest only in narrow niches. A firm can like your business and still be structurally unable to write the check.
Casting a wide net feels like playing the numbers game, and Kristian says he cannot count the times he has watched founders waste time doing exactly that. Doing your homework on who you are talking to before the conversation starts also conveys that you respect their time and their business, which improves the odds you get through the next gate.
We try to be transparent about our own criteria for exactly this reason. Novel works with US based software and tech enabled companies with at least $500,000 in trailing twelve month revenue. Meet those and the odds of us partnering are high. A company at $300,000 in revenue, an e-commerce company, or a company based outside the US is a no from us, and both sides are better off knowing that on day one instead of in week six.
Do that filtering on every name on your list before you send the first email.
A tactical shortcut Kristian recommends: put an LLM to work on the research. ChatGPT, Claude, or Gemini can take your website or a company overview and return a list of investors who invest in companies like yours, then turn that into a table with names and emails. His view is that it saves a tremendous amount of time and gets your outreach targeted.
On outreach channel, the question of cold email versus LinkedIn versus insisting on a referral has a simple answer: all of the above.
Have the data room ready before you need it
The format matters less than the contents. A Google Drive works. Paid data room tools add visibility into who accesses the room and which files they hone in on. Kristian’s read is that there is no right or wrong answer on how you deliver the collateral, even by email. What matters is what the collateral consists of.
Two pieces carry most of the weight. The deck, which has to answer use of funds. And the financial model, which has to show actuals and forecast. Actuals means revenue history, expense structure, cash balance, and runway. Forecast means where this goes and why.
Here is what happens when it is not ready. In our process, one of the first things we ask for is access to financials and banking information, followed by questions about the forecast. If a founder has to go build the forecast or update the books at that point, the whole process slides. We see plenty of founders who tell the story well and have a good deck but have not done the work on the financials. The deck gets the meeting. The numbers get the deal.
What we review: a current and accurate profit and loss statement, a balance sheet, and a forecast anchored to historical actuals, especially in the near term. Beyond that, our underwriting looks at growth in the range of 20 to 30 percent year over year, at least six months of runway, and gross profit margin, because if you are burning $200,000 a month and we provide half a million, you are back where you started in two months. We also look at customer concentration. We like to see at least ten customers making up revenue, with no single customer sitting at something like half of it.
One piece founders consistently underinvest in is the CRM. Kristian asks to see pipeline and often finds it close to non existent. That matters because a serious investor will not accept a top down forecast built on average growth and churn rates. They will ask how many people you are actually talking to, how big those deals are, when you expect them to close, and at what probability. That is how the forecast should be built in the first place.
Two benchmarks Kristian flagged for the model itself: customer acquisition payback has generally been considered healthy under twelve months, and closer to zero is better, while most investors want to see at least three dollars of lifetime value for every dollar spent acquiring a customer.
One more thing worth knowing while you build all this. Reporting obligations do not end at close. They are typically quarterly, sometimes monthly, and they sit in term sheets for a reason.
Time it so you are not negotiating from weakness
Runway is a criterion, not just a comfort.
If you wait until your last month of cash, Kristian’s point is that you should not be surprised when someone says no, or when the terms put in front of you are very investor friendly, because they know you need their capital.
Carlos’s advice is to start earlier than feels necessary, building relationships and understanding requirements before you have the capital need at all. Founders who show up too close to it, either running out of money or trying to execute a strategy in the next few weeks, find their options narrowed and things get complicated.
The clock does not stop at close either. Once you take the money, the clock starts. Absent the business firing on all cylinders in a material way, the working expectation after a Series A is that you are closing a B in about eighteen months, and the investor who came in at the A actively wants that, because it marks up their position. So you either accept that this is the last round and size it to carry the company, or you are already planning the next one.
Worth saying plainly: bootstrapping is a legitimate path, either for the life of the business or until you can support venture level returns. Kristian’s pattern observation is worth sitting with. A company takes a $10 million injection, spending accelerates, and eighteen months later they are back at their starting point and cannot raise again.
What to do this week
Press releases about big rounds hide the multiple quarters, not months, of work behind them. Do not benchmark your week against someone else’s announcement.
Three moves, in order:
- Check whether your profit and loss, balance sheet, and cash position are current as of this month. If they are not, that is the first project, before any outreach. If you do not have a CFO, a fractional one or an advisor who can pressure test the model and read a term sheet is the highest leverage hire in this process. The founders we work with who have that support move through it noticeably faster.
- Open your CRM and rebuild next quarter’s forecast from actual pipeline: deal count, deal size, expected close date, probability. If the pipeline cannot support the forecast, you found the problem before an investor did.
- Write a list of twenty capital providers and, next to each, the specific criterion that makes you a fit. If you cannot write it, take the name off the list.
This piece draws on a conversation between Carlos Antequera of Novel Capital and Kristian Marquez of FinStrat Management. The full session is here: [link to replay].
If you have questions about your capital strategy, Carlos reads his own email: carlos@novelcapital.com. In his words, he is happy to help any way he can, even if it is not through Novel.
