193. Startup Maxims: Always Be Fundraising. Really?

VC Minute
ABF: Always Be Fundraising. Should you really always be fundraising? Here are some tips on how to evaluate if this is right for you.

VC Minute – quick advice to help startup founders fundraise better

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Always be fundraising. Really. Always?

First off, you should be wary of any pithy phrase with certitude. Moreover, any founder who has even attempted to fundraise, let alone see a raise through to completion, will know how it is an all-consuming distraction.

I joked about this in episode 18 of Runway, saying that investors want to know what your runway is after you raise this capital because fundraising is a waste of your time. Okay, well, not really a waste of your time. But it does take you away from what you set out to do: build a truly transformative business.

So why ABF? Always. Be. Fundraising. As you can probably surmise, this is about staying in touch with investors, not about actively selling equity on an ongoing basis. The simple act of sending investor updates is part of the ABF mindset. One update to your current investors. And a second update to your prospective investors, minus sensitive financial or strategic information, of course.

Founders who want to take ABF to the next level will make introductions to prospective investors in between rounds, whether that’s through referrals or outreach. They keep their fundraising CRM live and keep those conversations going. The main benefit here is that you get to build relationships. There’s that “relationship” word again. You’re not asking for money, you might not even be asking for advice. You are talking with people and starting that relationship.

However, there are downsides to ABF. The top of which is that fundraising is a distraction. You set out to build a business, not just fundraise. If things are going well, you need to be in the business, and you don’t need to be talking to investors. If things are going to shit, you need to be in the business fixing them. Not talking to investors who will not invest in you while the business is struggling.

So always be fundraising. At a minimum, I think the quarterly prospective investor updates are a great way to stay on top. Then it’s up to you to decide if you want to actively ABF. Or just turn it on selectively.

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast – get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

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