March 5, 2024

193. Startup Maxims: Always Be Fundraising. Really?

193. Startup Maxims: Always Be Fundraising. Really?
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Season 4

Text your thoughts directly to Rich.

ABF. Always Be Fundraising. Should you really always be fundraising? Here are some tips on how to evaluate if this is right for you.

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About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.     

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Always be fundraising.

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Really.

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Always?

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First off, you should be wary of any pithy phrase with a certitude.

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Moreover, any founder that has even attempted to fundraise, let alone see a raise through to completion, will know how it is an all-consuming distraction.

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I joked about this in episode 18 Runway, saying that investors want to know what your runway is after you raised this capital, because fundraising is a waste of your time.

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Okay, well, not really a waste of your time.

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But it does take you away from what you set out to do: build a truly transformative business.

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So why ABF?

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Always.

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Be.

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Fundraising.

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As you can probably surmise, this is about staying in touch with investors, not about actively selling equity on an ongoing basis.

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The simple act of sending investor updates is part of the ABF mindset.

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One update to your current investors.

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And a second update to your prospective investors, minus sensitive financial or strategic information, of course.

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Founders to take ABF to the next level will take introductions to prospective investors in between rounds, whether that's through referrals or their own outreach.

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They keep their fundraising CRM live and keep those conversations going.

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The main benefit here is that you get to build relationships.

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There's that"relationship" word again.

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You're not asking for money, you might not even be asking for advice.

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You are talking with folks and starting that relationship.

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But there are downsides to ABF.

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Top of which is that fundraising as a distraction.

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You set out to build a business, not just fundraise.

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If things are going well, you need to be in the business and you don't need to be talking to investors.

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If things are going to shit, you need to be in the business, fixing it.

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Not talking to investors who will not invest in you while the business is struggling.

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So always be fundraising.

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At a minimum, I think the quarterly prospective investor updates is a great way to stay top Then it's up to you to decide if you want to actively ABF.

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Or just turn it on selectively.