How Long Does it Really Take to Raise Venture Capital?

Capital Raising 101

Expect the best, plan for the worst.

There are many misconceptions out there about raising capital — one of the most prominent being the length of time it takes to complete a round. It is very often underestimated and therefore miscalculated in terms of resources, commitment, and runway. Unfortunately, it’s never quite as easy as going to market and landing the first investor you have coffee with.

The capital-raising process typically takes much longer than anticipated, so entrepreneurs need to plan for that — then you will only be pleasantly surprised if it goes any other way. Despite this, there are things you can do to give your company the best chance of raising your round as quickly and efficiently as possible.

Pre-seed, post-seed, pre-A… what do these all mean and how do you correctly classify your round? They are continually evolving into new classes, but to keep things simple I’ve broken down the rough categories below to provide guidance for where you may fit.

*Please note this is based on typical software companies.

A good tip to keep in mind is that you are going to be judged and compared by investors to your peers in your round category. So if you’re where you best fit, generally go with the lower round classification based on your metrics, so you can lead in your cohort as opposed to falling short in a more competitive cohort. An extra factor to consider is where you are raising your round. For example, a Series A round in New Zealand will likely equate to a post-seed round in a US context based on the different traction expectations.

The timeframe and complexity of raising capital depend on the stage and sector of the business, and the team running it. A general rule of thumb is ensuring you are prepared for at least 6 months of raising. A very quick raise may take 3 months, and a long raise may take 9 months. If you’re going over 9…

Related posts:

Due to the dissertation hand-in that we all had its been a long time since I have given much attention to my honours project. It’s nice to now have just one project to focus on, and seeing as i’m not…