No, you are not elevating cash to extend your runway
I typically hear founders say they’re elevating cash to extend their runway by 18 to 24 months. In a way, that’s correct, however solely from the startup’s viewpoint. Nevertheless, that’s not what an investor is on the lookout for. Your organization surviving for an additional yr and a half isn’t the aim of a fundraise; that’s a facet impact at finest. It’s in all probability a good guess for the way lengthy the subsequent stage of the corporate will take, however solely as a result of 18 to 24 months is often the time horizon you’ll be able to semi-reliably predict.
However what occurs on the finish of these 18 months?
As an alternative, founders ought to talk to traders what a spherical of funding unlocks. That’s expressed in milestones, not in time. The aim is to rework the corporate sufficiently that you are able to do one thing that you just can not do at this second.
How a lot to lift?
How have you learnt how a lot cash you have to elevate? It’s a tough query, however it’s a vital facet of your startup journey. Establishing a transparent and sensible fundraising goal requires cautious consideration with one aim in thoughts: What hoops do you have to bounce via so as to have the ability to elevate your subsequent spherical of funding.