Lessons Learnt From Raising Our First US$1 million The average time it takes a startup to raise a round is approximately six months, depending on the region, but we all know about the rule of averages, and unfortunately this is one to be taken lightly.

Being a startup co-founder, pondering how to raise US$1 million is a daunting question. It comes to mind more often than not, especially in the early stages of your startup, when you desperately need that injection of capital to build your team, fuel your growth and hopefully reach profitability.

It is a marathon, not a sprint
The average time it takes a startup to raise a round is approximately six months, depending on the region, but we all know about the rule of averages, and unfortunately this is one to be taken lightly. It is most often a package of circumstances, luck and right timing, that will determine that duration. Some startups succeed in raising funds within a month, if they are well connected and have access to a wealthy network, whereas it might take others a whole year. No matter the situation you are in, plan for a minimum of six months from the time you start a conversation to the time you receive the funds in your bank account- signing a term sheet should never be seen as the end of the process).

Therefore, this means you need to budget in advance. The timing at which you should start to fundraise is also critical- summer periods or holiday seasons are usually dead, so take this into account. Optimal time to start fundraising is the second week of January up to July, and again from September to November. Most of us usually bootstrap our business in the first year, until we get an MVP and show early signs of traction. During that time, one of the co-founders should focus on the fundraise while the other (if you are lucky to have a co-founder and I recommend it strongly) should focus on progress of the business, as fundraising is a full-time job and requires diligence, stamina, and patience. Like in a marathon, you might hit a wall half-way in, but never despair and keep on pushing.

Build a relationship
Raising money and finding investors is like dating before getting engaged or married. I am no relationship expert, but whether you like it or not, it is a seduction game, and you need to make sure you find the right partner to share that gruesome (for the better and the worse) journey with you. Similarly, funds look for the right people to invest in, team and idea that fits their investment criteria, sector they are interested in, market etc. Therefore, there is no point for you to waste too much time chasing an investor that is not interested in the sector or market you are in, or you might be too early stage for them. Focus your energy on the ones that matter.

Do your market research, identify these potential investors, and methodically reach out to them. Once you get the first meeting, don't be too eager to close. Again, using the dating analogy, you most probably don't rush in too quickly and get on your knee immediately, but you get to know the person, her/his likes and dislikes, what he/she likes about you, if she/he is a good fit, and if you see yourself with her/him in the long run. My advice to those who fundraise is that your first meeting should never be about talking about term sheets or valuation, but just about your team, your idea, your vision, your progress, and who you are as a person. And let the investor ask you the questions about next steps if they are interested. Don't rush it, at the expense of looking desperate.

Bet on the team, the idea comes second
As per my earlier point, when you have lined up investor meetings (either through the people you know on a first-degree basis, referrals, or cold leads) make sure you focus the bulk of the conversation around the team, their skills, how they complement each other, how long they have been working together, and so on. This should be 80% of the conversation, with 20% only about your idea. This should also be reflected in your pitch deck, with your team slide at the beginning of it. Remember, you are still early stage, and most probably will pivot within a few months and become a different business down the road. For that reason, the investor is betting on you more than on your specific idea at this stage. Show skin in the game, by the time you start meeting investors, you should have bootstrapped your business, invested some money in it yourself, and most importantly be full time on it. Raising money while you have another job is a huge red flag for a potential investor.

Be transparent
This is something I abide to, no matter the stakeholder I deal with: investor, partner, supplier, and team member. From day 1 in your fundraising journey, do not hold back on anything, as it might backfire down the road. During your fundraising, things will be changing, different circumstances might arise, which is all something your investor will expect to see. May it be good news or bad, make sure it is shared early on, as it will save you time and explanation once your investor starts his due diligence. You might get away with it occasionally, but if you are dealing with a sophisticated investor, it will backfire badly. The more you share, the more comfortable that potential investor will be, and the more he or she will trust you. Again, like in any relationship, how many couples break up because they hid something from each other or weren't trustworthy?

Do not raise more than you need
I kept this for last, as I wanted to make sure this is the major lesson you should take from reading my piece. The vicious circle and dangerous game most startups play is raising the most money as quickly as possible, therefore making the headlines. This might have worked well for companies that needed to fuel impressive growth, but a clear majority of startups fail because of having raised too much money. With money come high revenue and quick results expectations in a very short amount of time. Additionally, the more you have, the more you will be prone to waste and spend without consideration. Aim at having profitable economics from day 1, not at raising insane amounts to flatter your ego.

Related: A Tale Of Triumph: Ambareen Musa, Founder and CEO, Souqalmal