Tactics For Raising in 2024

I recently had the chance to catch up with Nathan Beckord , CFA.? Nathan has spent his entire career helping companies raise capital, first with J.P. 摩根 then as a fractional CFO in Silicon Valley, and most recently as Founder and CEO of Foundersuite.com (for startups raising capital) and the newS Fundingstack.com (for VCs raising from LPs).??

Here are a few excerpts from our chat:

R: What’s going on in the world of startup funding?

N: It’s a choppy market right now. After blockbuster funding years in 2021 and 2022, the amount of money VCs put into startups fell by 50% in 2023. LPs are also cutting back their allocations to VC. ?

It’s a tough market -- deals are taking longer to get done, valuations are compressed, and founders are having to “hustle harder” to get their raises done.? But deals ARE getting done. We are seeing a lot of successful deals happening on our platform, especially in markets like AI… for example, one of our long-term customers, Pryon, just completed a $100M Series B.

R: Given the market conditions, what advice do you have for founders now?

N: If you have plenty of cash, and don’t NEED to raise, maybe wait 3-6 months… I predict that the funding market will start to open in mid-2024, as VCs are sitting on $31 BILLION in investment capital. So you might have an easier time in Q3 or so.

If you DO need to raise now, as mentioned, my advice to founders is to hustle harder, but what does that mean?? Fundraising is essentially a sales process, and since you can’t change the macro environment, you should focus on things under your control.

Tips for raising in the current market:

1. Increase the top of your funnel. Fundraising is a numbers game, so put in the hours, do the research, and add 50% more investors to your CRM or pipeline.? If you have 200 investors in your CRM now, grow that to 300. The more shots on goal you take, the higher your odds of success.
2. Expand your search: are you raising a Series A? Talk to VCs, but consider adding Family Offices, HNW, and corporate VC investors to your pipeline. Explore alternative funding sources like revenue-based financing, crowdfunding, or venture debt to supplement or fill out a round. ?
3. Broaden your geo: investors used to be hyper-local, but good startups are being built everywhere after COVID and the rise of remote work. Investors are MUCH more open to looking at deals from all over. Plus, another advantage is that you can pack in 3x more pitch meetings daily when it’s all done on Zoom! :)

R: What’s happening at your company? What are you most excited about?

N: We are off to a fast start in 2024. In January, we launched Fundingstack.com out of private beta. This is our new platform for i-bankers, VC funds and emerging managers to raise from LPs and help their port co’s raise capital.? We are seeing an explosion of new venture funds being launched… I view it as a growth market, so it’s exciting to expand into this market.

In February, we released “Foundersuite 2.0” which is our ground-up rebuild of our legacy platform for startups. This product has been in the market for 7+ years and over 80,000 startups have used it to raise capital, but it was due for a refresh. ?

Going forward, we are, naturally, incorporating AI into both platforms to help fundraisers identify “good fit” investors and to help them communicate with them.? We are also expanding our investor database to cover more long-tail investors such as celebrities, athletes, trusts, foundations, endowments, family offices, etc. ?

The universe of private-market investors is very large – much larger than just angels and VCs – so we are working to open up these alternative channels to both founders and emerging managers.

Hopefully, we’ll see the market bounce back, and we can help even more worthy founders realize their funding goals! ?