Fundraising Story

Fundraising Story
Read time 1.9 minutes

Today, I wanted to share a quick story about the past few months.

As many of you have likely experienced, the current fundraising scene is tight. It is difficult for most companies to raise as the bar has been high. There is also a significant lack of liquidity in capital markets, which squeezes founders looking to raise their capital.

In the last four months, I’ve had three founders I work with receive a term sheet, sign the terms sheet, and then either have a VC back out or try to renegotiate the terms. This is the market we are living in. It is a VC-driven market, not a founder-led market.

Why am I sharing this with you?

Too many founders stop their fundraise once they receive a term sheet. They think that this term sheet is the end goal and that they should focus on due diligence and getting the deal with that VC over the finish line.

The reality is that the best way to get that deal to close is to keep running your fundraise. External pressure from other VCs who might be interested in funding you forces an investor to follow through on their deal. Term sheets are not legally binding; you should not rely on them.

Even if you do have a legally binding agreement, you don’t have the time or money to sue an investor for failing to follow through. So you need to use your leverage, which is competition. Once multiple VCs are interested, you can create FOMO and push VCs to close the deal before they miss out.

So remember, don’t stop your fundraising when you get a term sheet. Stop when you get money in the bank.

Are you looking to grow your business? Here is how I can help:

📢 Promote your startup to 2,000+ VCs including investors from a16z, YC, Techstars, Rarebreed, Sequoia and more.

📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)

📺 Access FundraiseOS, the ultimate fundraising course with video lessons and practical worksheets helping with everything from deciding how much to raise to understanding a term sheet.

💸 Promote your product or service to 100,000+ entrepreneurs.

🌐 Connect with me on LinkedIn or X (formerly Twitter) to get access to new content about startups, fundraising, venture capital and more every day.

Liam’s Exclusive Partner Discounts:

• Startups get six months free of Zendesk's industry-leading customer support solution that's scalable and easy to use.

• Get 20% off Keap's automated sales and marketing solutions, tailored to boost business growth with automation tools and coaching.

• Get 40% off Mobly's lead capture app that enriches data and pushes to your CRM instantly for their first year, worth up to $3,000 in savings.

Onwards and Upwards,

Liam Gill