While the fundamentals of fundraising are a constant in most seasons and circumstances, certain market trends, economic conditions, and ecosystem shifts can play heavily into how fundraising rounds shake out.
To help founders keep a pulse on timely factors influencing the fundraising landscape, our Fundraising Today series shares a monthly pulse check from a seasoned investor to understand what founders should keep in mind — taking into account both the baseline principles of fundraising and the rules of the moment.
In this episode of Fundraising Today, Mercury’s head of community, Mallory Contois, chats with Jason Heltzer, who has been a venture investor for 22 years. Currently, he is a managing partner at Origin Ventures, which focuses on software and marketplace businesses built for the digitally native generation.
Below, we summarize Jason’s tips for founders kicking off early-stage fundraises as of June 2023. For full context and great examples of the tips summarized below, make sure to watch the full conversation.
- Be prepared for a longer and more difficult fundraising process.
- Approach funds that align with your business' investment focus and stage.
- Develop a compelling narrative that highlights strong unit economics and sets your company apart.
- Differentiate your company by identifying problems within the industry, fixing them, and solving a problem through industry insight — and with a contrarian viewpoint.
- Don't focus solely on the best terms or the first commitment; find a good partner and conduct due diligence on the firm and the person leading the investment.
- Ensure you have enough time to raise capital and to avoid running out of capital without leverage.
- Gather strong commitments from existing investors to demonstrate support.
- Consider stretching your runway, but only if it helps you achieve milestones that reduce risk.
- Evaluate the cost of capital against the opportunity cost of not taking the funding.
- Avoid under-capitalizing the business by seeking enough capital to support growth.
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