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  • At the early stage, raising capital is less about the numbers and more about the people. An investor is looking for “founder-market fit”.
  • Ensure that you know your market and your competition extremely well. At an early stage, before you can achieve network effects or economies of scale, this is your one defensive moat against the competition.
  • It is best to avoid outreach to investors until you know you’re ready to raise funding. Once you do engage, talk to investors in parallel, prioritising them by expected value, until you accept offers openly. That being said, you shouldn’t wait until you need money to start raising.  
  • As fundraising is a distraction from operating, a startup should either be in fundraising mode, or not. When you do decide to raise money, it should be the focus of your whole attention; ensure that you can get it done quickly, with a plan to get back into operational mode in a certain timeframe. 
  • In the early rounds, spend more time on operations than on raising funds. It will pay off later. 
  • Fundraising will not make a company successful in and of itself. Capital is a means to an end. The primary goal should be to get it over with and get back to what will make you successful: talking to customers and building the solutions they’re happy to pay for. 


  • Make sure you’re able to clearly articulate  your value proposition before you consider asking for funding.  
  • Ask for advice early, while you’re building the business. As the saying goes: “if you ask for advice you may get some money; if you ask for money, you may get some advice.” 
  • Look for investors who add significantly more than just capital, including help with customer acquisition, recruitment, talent sourcing, and introductions to other valuable partners. As investor Zach George says, “smart founders have learned to say no to investors that don’t add any of that value.” 
  • Perform due diligence on potential investors. Know their mandate, strategy, portfolio performance, and how you can add value. 
  • Focus on different plans. When talking to different types of investors, you should err on the side of underestimating the amount you hope to raise. 
  • As one example, if you’d like to raise $500k, it’s better to say initially that you’re trying to raise $250k. Once you reach $150k you’re more than halfway. This course sends two useful signals to investors: 1) that you are doing well, and 2) that they will need to move quickly because you’re running out of room. Whereas if you were raising $500k, you would be less than a third complete at $150k. If fundraising stalled there for an appreciable time, your round might start to read as a failure. Saying initially that you’re raising $250k doesn’t limit you to raising that amount. When you reach your initial target and you still have investor interest, you can simply decide to raise more. 


  • Your business will be in a very strong position if your plans include one for raising zero dollars. That is, you can make it to profitability without raising any additional capital. Ideally, you want to be able to say to investors “we’ll succeed no matter what, but raising money will help us do it faster.” 
  • Think about liquidity. Your investors care a lot about this, and you should too. How does the equity stake you are selling to them turn into a healthy return for their own investors?
  • If you’ve sold more than around 40% of your company, it becomes harder to raise a Series A round at the top end of the scale, because VCs worry there will not be enough equity left to keep the founders motivated. 
  • The key is to not make fundraising too complicated. In spite of the different nuances and edge cases in the market, AfrInform offers a simple guide. 
  • Avoid introducing complicated features and optimisations, avoid offering the same indulgence to investors. 


  • Do not raise more than you can afford to. That is, avoid excessive dilution. If your valuation is high early on in your company’s lifecycle. Investors will expect you to show similar (if not faster) growth when you raise money again in the future. If you cannot justify a rise in value, you may need to settle for a “down-round”, an investment that results in a lower company valuation than previous rounds. 
  • Your goal when fundraising should be to raise as much money as needed to get to your next “fundable” milestone, which will usually be 12 to 18 months later. 
  • Show that you have a firm grasp of the key metrics that drive your business. Learn to speak authoritatively about your numbers, now and in the future. Aside from committing them to memory, you should maintain this information in a data room where investors can access the information they need to take a decision. This may seem obvious, but we find it missing in too many cases. 
  • The last point is also the first point and the prevailing point across the process: always tell the truth. Confidence is good, but hyping up your company now could lead to down-rounds when you fail to meet unreasonable expectations.