When To Ask For More Money From Your Startup’s Investors
The short answer is now. The correct answer is a little more nuanced.
Ask any veteran entrepreneur and they’ll tell you that raising money for your startup is exactly like running on a treadmill — only the treadmill is set to automatically increase in speed with the close of every new round of funding. And there’s no pause button, just that ripcord you can pull one time to shut the whole thing down.
Oh, and you don’t get to pull that ripcord, your investors are the only ones with access to it.
So a word to the wise founder: You should never think of fundraising in terms of the single lump sum of money that you’re asking for right now. You definitely need to think of funding as one raise at a time. When you close this round, you go directly to planning the next round.
Of course, it’s bad form to start negotiations on the next term sheet the minute the new cash is wired to your bank account. Your investors will want to see that money put to work and they’ll also want to measure the results. In fact, they’ll be watching very closely, and hammering you about it at least once a month in board meetings.
All this means you need a plan for your first raise that builds the story for your next raise, which lays…
