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What's the best time of the year to raise venture capital?

Submitted by admin on Wed, 2019/12/04 - 11:37am

A lot is made of the best practices around raising capital—but I think a lot of the advice is a bit too clever. First off, most of it is parroted by people who never raised any money.

No one ever says, “My idea wasn’t good enough and that’s why we didn’t raise.” They’ll come up with a lot of reasons why raises didn’t happen, like “The round fell apart because it was too close to the holidays.”

“No one ever says, “My idea wasn’t good enough and that’s why we didn’t raise.” They’ll come up with a lot of reasons why raises didn’t happen…” Click to Tweet this quote

VCs want to make money and there’s more money out there than there are good ideas—so I just don’t buy into the idea that there are a bunch of good companies out there whose fundraising purely depends on getting into a VC’s inbox on the right day of the calendar. When a company is beating its plans and a team is super compelling, a VC will go out of their way to fund something no matter what time of year it is.

That being said, VC bandwidth is limited—so if there are times when more people are pitching versus less, or when they are working more or less, that might have an affect. However, if you follow the conventional wisdom, everyone should pitch in January and no one should ever pitch two weeks into December.

But, if you were the one maverick who did pitch two weeks into December, and the VC isn’t off for vacation yet, than wouldn’t your chances be greater?

I think founders should be more concerned with “How can I get on someone’s calendar” than when the deal will actually close. There’s something to be said for trying to get onto the calendar during times when it isn’t likely that anyone else is—like those August and December time periods. A few years ago, I went to SF to connect up with other VCs and went 12 for 12 in getting VC meetings the week before Christmas. No one takes off that week and, not surprisingly, no one pitches.

You should be pitching when you have the best story—when the money and resources you have as taken you as far as you can go while still leaving yourself enough runway to raise. But how do you know when that is?

At Brooklyn Bridge Ventures, we created a kind of focus group for venture, populated with real VCs. It’s called Feedback.vc and it’s a double blind system that looks a bit like a YC application. Ten VCs look at it and give their feedback anonymously, with the results being summarized in a report that looks like this.

If you want to be one of the first to check it out, use the code FOUNDER50 for 50% off the feedback report. This way, no matter when you pitch, you know you’ll be putting your best foot forward.

Read Complete Article Wednesday, December 4, 2019