What Startup Founders Get Wrong When Raising Money (and How to Fix It)

One of the most common mistakes I see founders make is sending through pitch decks that fail to answer the basic questions VCs are looking to address. I’ve written before about what makes a great pitch deck, so I won’t dwell on it here, but this is often just the start of where things can go wrong. Beyond pitch decks, there are several common missteps I see time and time again—issues that can derail even the most promising startups. Let’s unpack some of the most common pitfalls and, more importantly, how to avoid them.

1. Spending Too Much Time Fundraising

When founders send me their pitch decks, one of my first questions is: “Where are you in the process?” I want to know when they started raising, how many investors they’ve spoken to, and how those conversations are progressing. These answers often tell me a lot about their approach—and whether they’ve underestimated how much focus and momentum a good fundraise requires.

Fundraising is inherently time-consuming and pulls founders away from their core mission: building and growing the business. That’s why VCs often look for founders who approach fundraising with a sense of urgency. Every day spent raising money is a day not spent shipping product, closing deals, or driving growth.

Unfortunately, many founders take a relaxed, drawn-out approach to fundraising. They’ll meet one investor this week, schedule another conversation in two weeks, and let the process drag on for months. Some founders even seem to exist in a permanent state of fundraising. This isn’t a good look—it makes your startup appear unfocused and suggests your time isn’t being spent wisely.

Instead, aim to compress your fundraising into a tight, focused window of about six weeks. Doing so sends a clear message: you’re serious, disciplined, and have a plan.

2. Not Understanding VC Psychology

Despite their analytical reputation, VCs are as influenced by psychology and market dynamics as anyone else. While many pride themselves on being contrarians, the reality is that VCs often take cues from each other. The fear of missing out (FOMO) on a hot deal is real—and savvy founders know how to leverage it.

When you’re speaking to multiple investors in a short timeframe, you create a sense of urgency. VCs know their competitors are also in the mix, which pushes them to act faster. The opposite is true if your process is slow and sporadic. Without competition or time pressure, there’s no incentive for a VC to move quickly. In fact, they might prefer to wait and see how you progress over the coming months.

Worse, a slow fundraise can send the wrong signals. VCs are pattern-matchers by nature, and they look for social proof. A lot of buzz around your startup? That’s a good sign. Crickets? Not so much. Think of it like a restaurant: an empty dining room can make you question the quality, while a packed house creates excitement and curiosity—even if the crowd is there for a happy hour promotion.

The best founders engineer this buzz by running a tight, well-organized process that creates urgency and demand.

3. Raising at the Wrong Time

Timing your raise can be just as crucial as the content of your pitch. Certain times of the year—like late July or early August—are particularly tricky for raising in Europe, as many VCs are on summer holidays. Similarly, the festive season, from late November through December, can result in delayed responses as people wind down for the year.

If you’re nearing the close of your round, you might just experience some delays as associates chase partners or legal teams for signatures—not the end of the world. However, if you’re only partway through your raise, these quiet periods can kill momentum and stifle progress.

Many founders know to avoid starting their raise during these months, so this pent-up demand means that September, October, and January through February tend to be extra busy. But the sweet spot might actually be March and April, when competition for VCs’ attention is lighter.

Alternatively, raising during slower periods—like summer or the holidays—could be a counterintuitive strategy. While fewer VCs might be available, those who are still around could be more receptive, as their deal flow has significantly dropped off.

The key takeaway here is to be aware of these seasonal dynamics and plan accordingly. Otherwise, you could find yourself mid-fundraise, only to be blindsided by weeks of silence as VCs take a break.

4. Talking to Too Few Investors

Another common mistake is underestimating how many investors you’ll need to pitch to get a term sheet. Many founders approach fundraising with a short list of 5–10 “dream” investors, confident that at least one will say yes. They’ll meet with these investors over a few weeks, only to find that none bite.

Fundraising is, at its core, a numbers game. In my experience, if you reach out to 50 VCs:

• 25 will respond

• 12 will take a first call

• 6 will request a second meeting

• And if you’re lucky, 1 or 2 will offer you a term sheet.

That’s why I recommend creating a robust investor pipeline. If you’re a second-time founder with a strong track record, 20–30 investors might suffice. For most founders, though, 50 should be the minimum. In fact, many successful founders have a CRM with 80–120 names.

5. Targeting the Wrong Investors

Not all investors are a good fit for your startup, and reaching out to the wrong ones can waste valuable time. Yet I often see cold emails from founders who haven’t done their homework:

• U.S.-based startups pitching European-focused funds.

• Seed-stage startups approaching Series A investors.

• Messages riddled with errors, like getting my name or fund wrong.

This scattergun approach rarely works and has made VCs more cautious about cold inbound emails. Most now prefer warm introductions from trusted sources like angel investors, portfolio founders, or other VCs.

6. Not Building an Solid Investor Pipeline

That’s why building an Investor CRM is so important. Your CRM doesn’t have to be fancy—a simple spreadsheet works fine. Include details like:

• The fund’s focus and stage preferences.

• Recent investments in related (but not competing) spaces.

• Key contacts and potential connections for warm intros.

• Whether they’re a top, mid, or lower-priority target.

• The stage you are in the conversation (initial email, partner pitch, term sheet).

Start with a broad list, but prioritise investors who are the best fit for your stage and sector. Begin outreach with a “practice batch” of good but not top-priority investors. Use these early conversations to refine your pitch before approaching your top choices.

Running the Perfect Fundraise

The ideal fundraise looks something like this:

• A well-researched CRM with 50–120 qualified investors.

• Starting your raise at the optimal time.

• Setting up two to three calls a day over a focused six-week period.

• Sharing a clear narrative that generates excitement and FOMO.

• Multiple term sheets to give you leverage in negotiations.

This approach not only increases your chances of securing funding but also signals to investors that you’re disciplined and know what you’re doing. Most importantly, it allows you to get back to the critical work of growing your business.

Fundraising is tough, but with the right strategy, it doesn’t have to be a slog. By avoiding these common mistakes, you’ll not only improve your chances of success but also make the process smoother and more rewarding. Good luck—you’ve got this!