TL;DR: The Best Time to Raise VC Money Is When You Don’t Need It
The best time to raise venture capital is when you have strong user or revenue traction, a proven growth engine, and clear goals, as this ensures better terms and investor competition. Delaying funding until after bootstrapping can preserve control, enable sustainable growth, and attract the right investors.
• Raise only to accelerate what’s already successful, not to figure out your business.
• Avoid undervaluing your company by fundraising pre-product-market fit.
• Timing matters; align with active investor seasons for better results (see startup resources).
If you’re still navigating funding options, explore guides like angel investor networks tailored for early-stage startups in Europe.
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I’ve asked this question countless times: “When is the best time to raise venture capital?”
Not as a casual observer or someone writing from the sidelines but as a parallel founder who has bootstrapped businesses, raised funding, and worked deeply in the trenches. Personally, I’ve built and scaled startups in deeptech, gamified entrepreneurship, and AI tooling, so this isn’t theoretical to me. It’s the life I lead every day.
When I started Fe/male Switch, the question of whether to take outside funding came up earlier than expected. As a bootstrapped founder, I had already proven that you can build meaningful things with nothing more than a laptop and zero-code tools. But when I had surpassed initial user traction and started collecting real feedback, suddenly the allure of venture capital danced in front of me. “Imagine how much faster you could grow if you poured gasoline on this fire,” people would tell me.
At first, I hesitated. Let’s be honest: raising pre-product-market-fit (PMF) means giving away equity just to figure out your business, a learning curve that ends up costing dearly. Instead, I chose to bootstrap to $1M ARR before even thinking about entertaining offers. I prioritized control, a sharp focus on serving my users, and experimenting on my terms.
Looking back, it was the best thing I could have done. Here’s why and how this approach might apply to your own decisions about funding.
Why I Bootstrapped and What I Learned
When I faced the decision to fundraise, I chose to delay it. Instead, I committed to bootstrapping. My rationale was simple yet deliberate:
- I wanted leverage. By waiting until revenue spoke louder than my pitch deck, I aimed to negotiate better terms with any future investors.
- I valued autonomy. VC interest always comes with strings, board oversight, growth pressure, expectations of an exit within 5, 10 years. I wanted freedom to grow Fe/male Switch on my own timeline.
- User validation mattered more at that stage than investor validation. My mission was crystal clear: empower women to practice entrepreneurship through a game-based incubator. Asking users for feedback felt far more important than pitching to investors.
By bootstrapping, I created space to experiment, fail, iterate, and learn without reporting to anyone outside my core team. I didn’t just build a product, I built infrastructure to scale it sustainably.
If I’m being brutally honest, though, there were challenges. Growth could have been faster with external capital (but at what cost?), and bootstrapping required making trade-offs between reinvesting and personal sanity. There were moments I wished for the ease of writing checks rather than stretching resources.
But here’s the kicker: waiting until you don’t need funding to raise it doesn’t just grant you leverage. It attracts the kind of investors who want to be part of success, not those hoping to impose their version of it.
When Is the Best Time to Raise VC Money?
Based on my experience and what I’ve observed from hundreds of founders, the best time to raise VC funding is when three key factors align:
- Your user or revenue traction is undeniable. Investors chase certainty, so the more proof you have of product-market fit (PMF), the less convincing you need to do.
- You have a clear growth engine primed for acceleration. Venture capital works best when it’s used to scale an already-functioning system.
- You know exactly what you’re optimizing for. Maybe it’s speed. Maybe it’s market domination before a competitor catches up. But it has to be deliberate.
Timing also matters in a literal sense. According to Forum Ventures, investors are most active from January to May and September to November. Avoid trying to raise during summer holidays or December when deals drag or stall entirely.
The Best Time Is When You Don’t Need It
Think about the psychological advantage: investors want what they can’t have. If you walk into a meeting and say, “I don’t need your money, I’m doing fine without it”, you shift the power dynamic entirely. Investors will compete for your attention rather than the other way around.
Bootstrapping not only builds a stronger startup, it builds a stronger founder. You learn faster because you spend your money more carefully, testing assumptions and investing in systems that work. By the time you decide to raise, you’re battle-tested and better prepared.
Lessons From Founders Who Took Different Routes
Through conversations with founders in my network, I’ve seen broad patterns that shape how people reflect on their funding choices:
- Founders who raised early often regret it. They gave away too much equity while the business was still figuring things out.
- Those who waited felt they had leverage. Many point to the confidence boost and freedom of choosing investors rather than being chosen by them.
- Conditional raisers rarely regret it. These founders strategically timed their raise around inflection points, launching a major feature, entering a new market, or hitting PMF. Most achieved above-market valuations by doing so.
The lesson from all these stories? It’s not about what’s “right” or “wrong.” It’s about aligning your choice with your unique situation.
What I’d Tell You As a Founder
If you’re deciding whether to raise, here’s my advice:
- Take stock of your stage, constraints, and goals.
- Bootstrap longer than you think is necessary, it builds resilience and clarity.
- Raise money not to survive but to accelerate something that’s already working.
The decision isn’t easy, but it’s yours to make. Trust that your specific context matters more than anything anyone else tells you. And remember: raising VC isn’t a milestone, it’s a decision about strategy and leverage.
People Also Ask:
What is the best time of year to fundraise?
The best times for fundraising are mid-January to mid-May and post-Labor Day to Thanksgiving. During these periods, venture capital activity is high, allowing for easier access to meetings and faster deal closures.
What is the 80/20 rule in venture capital?
The 80/20 rule, or Pareto Principle, in venture capital implies that around 20% of a fund's investments generate 80% of its returns. Often, the concentration is even more extreme, with only a handful of companies driving almost all profits.
When should one go for venture capital funding?
A business should seek venture capital funding when it has achieved significant growth and faces competition in the market. This stage ensures the funds can help the company scale, compete, and expand effectively.
When is venture debt a suitable choice?
Venture debt is often taken alongside an equity raise or shortly after closing a funding round. It can also be used between rounds, provided the company has about 9-12 months of cash runway.
Why is raising funds when you don’t need it recommended?
Raising funds when not in urgent need allows businesses to negotiate from a position of strength, avoid desperation, and secure better terms. It also provides a financial buffer for unforeseen challenges.
Which months are ideal for venture capital pitches?
The ideal months for pitching to VCs are typically March through May and September through November. These timeframes align with peak investment cycles, ensuring greater attention from investors.
When should startups avoid fundraising?
Startups are generally advised to avoid fundraising during December, the summer months, or other holiday periods when investor interest and availability may be lower.
What factors should determine the timing of raising startup funds?
Factors such as market readiness, product validation, and investor availability should guide the timing for raising funds. Startups should aim to raise when they can showcase growth potential and solid business fundamentals.
How should companies prepare before seeking venture capital?
Companies should establish a clear business model, demonstrate market validation, and outline strong growth plans. Building a positive relationship with potential investors in advance can also be beneficial.
What is the importance of identifying “home-run” investments in VC?
Venture capital success heavily relies on identifying a few high-return investments that can compensate for the underperformance or failure of others. These "home-run" investments significantly drive overall fund profitability.
FAQ on When to Raise Venture Capital
What should founders prioritize before raising VC funding?
Founders should focus on achieving undeniable user or revenue traction and building a sustainable growth engine. This ensures leverage in negotiations and attracts investors aligned with their vision. Explore the Bootstrapping Startup Playbook for practical strategies.
How can female entrepreneurs strategically approach fundraising?
Female entrepreneurs can use methodologies like privacy-centric growth and intentional bootstrapping. These strategies enhance resilience and optimize timing for external funding. Discover tailored resources for female entrepreneurs.
Should founders leverage AI tools during early-stage growth?
Absolutely, AI tools help startups optimize cost, automate processes, and streamline marketing strategies effectively. Leveraging AI early can strengthen systems before scaling with VC assistance. Dive into AI automation strategies for startups.
Is it better to raise capital early or wait for product-market-fit?
Waiting for product-market-fit ensures stronger negotiation power, higher valuations, and less equity dilution. Early fundraising often leads to costly trade-offs. Learn from founder experiences shared in “VC Funds Pattern Recognition”.
How do seasoned founders decide when to raise venture capital?
Experienced founders often sync VC rounds with inflection points, major launches, entering new markets, or scaling post-PMF. This showcases momentum and secures competitive valuations. Learn more about timing strategies from Forum Ventures.
What role do angel investors play for startups delaying VC funding?
Angel investors provide smaller rounds with less stringent terms, helping startups navigate early growth while retaining more equity. Discover top angel investors for early-stage startups.
How can startup founders prepare for better fundraising results?
Planning is critical, streamline operations, refine pitch decks, and optimize timing to maximize investor engagement during active windows. Explore the European Startup Playbook for detailed frameworks.
Why is bootstrapping considered valuable for founder growth?
Bootstrapping fosters resilience, forces clarity, and enables experimentation without external oversight. By the time startups raise capital, they’re stronger, confident, and more investor-ready. Gain insights from seasoned entrepreneurs like Violetta Bonenkamp.
How do seasonal fundraising cycles impact VC timing?
VC activity peaks January-May and September-November. Avoid slow periods like summer vacations and December holidays to improve conversion rates. See timing tips from Alexander Jarvis.
Why should founders treat raising VC as a strategic decision?
VC funding isn’t a milestone, it’s a strategic tool to accelerate proven models. Founders should raise deliberately, optimizing for goals like speed or market domination. Discover lessons from top startup podcasts.
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the “gamepreneurship” methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the point of view of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
