How to Raise Your First Round of Financing Asheesh Advani offers three tips for raising cash with a second round in mind.

I received an education about money during the last recession. I was raising money for my startup by stringing together a series of small investments from angel investors, friends and relatives. It was a tough slog, but I eventually assembled a group of investors and a board of directors.

Not long after, an investor offered to make a sizable investment. But the share price he offered was lower than that paid by previous investors. I only had three months of cash in the bank and was desperate to accept, but the board turned down the offer. Despite my protests, I was back to the drawing board with 90 days to find an investor willing to pay a higher price. I eventually did find one, but only after two more years of stringing together small investments at incrementally higher share prices from angels, friends and relatives.

My story isn't unusual; entrepreneurs who have raised money through private investors know shareholders will fight to avoid dilution. The interests of founders, new investors and shareholders often diverge between the first and second round of financing, particularly during recessions. Here's how to raise your first round of financing with your second round in mind.