TLDR

  • It depends - How long it will take you to raise will be somewhat determined by what round you're raising, what vertical you're operating in, whether you're a first time founder and the extent of your network.
  • Be self-critical - Your ability to reassess and reconsider your approach to fundraising is an equally important part in ensuring success.
  • Overestimate - In general, raising a round will take longer than you think. A typical seed round takes 12.5 weeks but can take 40 weeks to close. You don’t want to underestimate the period between deciding to fundraise and receiving money in the bank. Doing so will mean you run out of runway and fail to have enough money to carry your startup to its next milestone.

The time you will need to complete a fundraising round will, like a lot of things, depend on a variety of factors.

Is it your first fundraising round or are you raising a Series A, B or C? What space are you operating in? Is your startup’s vertical currently a hot topic? What type of company is your startup? Have you founded a startup before? If so, was it successful and how successful? To what extent do you have, or have begun building, relationships with investors? How extensive is your network? How much are you looking to raise? All of these will influence how quickly you can close a round.

In general though, raising a round, particularly at the Pre-Seed/Seed stage, will take longer than you think. It is important, therefore, to not let an initial lack of traction demotivate you and an absence of patience mean you throw in the towel prematurely.

Only after a few months of trying, and failing, to raise capital should you begin reassessing your approach and/or reconsider your product and value proposition.

Your ability to do this is an equally important part in ensuring success. A good rule of thumb is that if you haven’t closed any investors after contacting one hundred, then it is time to rethink your approach and go back to the drawing board. (This is presuming you’ve taken listened to and actioned feedback from investors and adapted your pitch to reflect constructive criticism. If your one hundredth pitch is the exact same as your first pitch, this should be a major red flag).  

According to research conducted by DocSend, on average, a typical seed round takes 12.5 weeks. There is, however, much variation around this, e.g. 1/5th of companies took 20 weeks or longer whilst another 1/5th took six weeks or fewer. The longest successful round took 40 weeks to close.

For most startups, raising their first round is the trickiest. If you have a strong, established network of investors and/or are a serial entrepreneur, it may be easier, but most founders don’t fall into this category.

The ability to execute on your ideas is important and speed is, admittedly, an important factor when it comes to fundraising. You don’t want to take too long in the fundraising process and get lost. However, the fact of the matter is that if you’re new to the process and are building your network from scratch, things will inevitably take time. In general though, no matter your starting position, your fundraising process should not last more than 12 months.

If you're raising a Series A round, the process is usually easier, quicker and more lucrative. This is due to experience & familiarity with the fundraising process, an existing network, validation from existing investors, proof of concept and the fact fewer investors tend to be involved in later stage rounds. Research by DocSend found that Series A rounds took an average of 9.6 weeks to close, 24% less time than the average time needed for a Seed round.

Anticipating the length of time it will take for you to successfully raise and close a round is very important. You don’t want to underestimate the period between your decision to begin fundraising and actually receiving money in the bank. Doing so will mean you run out of runway and fail to have enough money to carry your startup to its next milestone.

Bear in mind that before you even announce a raise or present your pitch deck to an investor, you need to be building relationships and asking for introductions. You want to be nurturing prospective and, if applicable, existing investors ahead of the point at which you commit to starting and closing a round.

Fundraising is a full-time job for the CEO and it rarely takes less than a month, more likely 2-3 months if you've done it before and sometimes even up to 6 months for first-time founders without existing networks.
You'll need to be in touch with at least 20 target investors, although I've seen startups reaching out to around a hundred or even more. Usually you'll end up with about 5 who are interested and once you get the first hard commitment, others will follow soon.
Remember that a signed term sheet is not the end of the journey. It will take from 2 weeks to even 3 months before you sign the term sheet and the money lands on your account. If you're in Europe, aim at those investors who can wire in less than a month. In the US, 2 weeks or even less is more of a standard.
1 month fundraising, 1 month closing (it never ends). The reality for first-time founders is often 3 months fundraising, 3 months closing.

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