What I Learned from Raising Money

One of the most common conversations I have with early stage founders is about raising money from investors. There’s a lot to unpack, so I’m splitting this into two parts. Part 1 is about my personal experience and what I learned. Part 2 will focus on when raising money actually makes sense.

Fresh out of business school, I became a hunter of entrepreneurs with cool ideas. I knew how to write a business plan and build a pitch deck, and my team knew how to design logos, create brand bibles, and build prototypes. We partnered with founders who were sharp, ambitious, and genuinely solving interesting problems. On paper, we had everything we needed to raise money. More importantly, I believed that if we did everything right, the capital would follow. A strong idea, a clear plan, a compelling pitch. It felt like a formula we could execute.

This was the early 2010s, during the rise of mobile apps. The iPhone and App Store were still new, Instagram launched in 2010, Spotify in 2011, and investors were actively searching for the next breakout platform. Product-driven companies weren’t as prominent, although Dollar Shave Club made waves in 2012 with a viral YouTube video and quickly disrupted an established industry. Timing matters when you’re raising money, and we believed we were positioned in the right moment.

Our company operated like an incubator. We provided the resources to get startups off the ground in exchange for equity, and we relied on our partner entrepreneurs to take the companies to the finish line. We were deeply involved in fundraising and were able to get in front of many investors. At the time, access didn’t seem like the barrier. Investors were open to meetings, especially around mobile. FOMO was real.

The portfolio was diverse. We had a food company, a music streaming app, a fitness product, and several mobile apps. Our founders were accomplished in their careers, and from our perspective, the odds felt stacked in our favor. What we didn’t understand yet was the ecosystem we were stepping into.

In nearly every investor meeting, we were never told “no” outright. Instead, we received encouragement.

“This is very interesting, please keep us updated.”
“I’d love to see how this develops, stay in touch.”

At first, it felt like validation. It was enough positive reinforcement to keep going. Over time, I realized these were polite ways of keeping the door open without committing.

I remember one pitch meeting where everything seemed to click. We built a prototype that was genuinely unique. During the demo, investors were so impressed they kept bringing more people into the room. Eventually, the entire executive team was packed into a small conference room, shaking our hands and talking about what working together could look like.

Still, nothing closed.

Investors wanted the next big thing, but they also wanted proof. They wanted to see demand, traction, and market validation. That meant it was on us to go out and create that momentum.

That meeting became one of many like it. Strong concept, compelling prototype, great feedback. At one point we even received a term sheet. But we were still a very early stage company, and the terms reflected that. We had much bigger expectations than what was actually being offered.

Experienced investors had a consistent pattern. They would express excitement, then set benchmarks.

“Come back when you have more traction.”
“Let’s reconnect once you hit these milestones.”

It felt like progress, but it required us to keep spending more time and money without any certainty of return.

Looking back, it makes sense. Investors were evaluating our level of commitment. They wanted to know if we were truly all-in. The reality was that we weren’t. We all had full-time jobs and these companies were side projects, even for the founders. Our commitment was conditional. If we raised money, then we would consider going full-time.

Investors weren’t interested in funding the possibility of commitment, they were looking for evidence that this was our only focus. I see this pattern often. Founders wait for capital so they can go all-in, while investors look for signs that they already are.

There’s another truth I had to confront. Great ideas, pitch decks, prototypes, and MVPs are not enough. Serious investors want to understand how every dollar contributes to a return, often ten times over.

There are exceptions, but those exceptions depend on relationships.

I’ve helped founders successfully raise money, but those stories all share the same pattern. In every case the investors already knew them, or they were introduced through someone with significant credibility. The idea mattered, but the relationship mattered more.

You often hear that investors invest in people, not ideas. I believe that’s true, but more specifically, they invest in people they trust.

Access to capital flows through relationships, proximity, and long-standing networks. If you lack that access, fundraising becomes a full-time job layered on top of building a business, and most founders underestimate how consuming that process is.

What took me longer to understand is that I wasn’t just learning how fundraising works, I was learning when it actually makes sense to do it at all. There’s a difference between raising money because you need it and raising money because you know exactly what it will do for your business.

I’m currently not interested in raising money for anything I’m working on. That perspective comes from the benefit of experience. At the same time, I wouldn’t discourage anyone from going through it. You don’t know if it’s right or wrong for you until you do it yourself.

In the next part, I’ll break down how I think about that decision now, when raising money can accelerate what you’re building, and when it quietly works against you.