Startup Fundraising Timeline: From First Pitch to Term Sheet

Fundraising takes longer than you think.

The average seed round takes 3-6 months. Series A can take 6-12 months. Plan accordingly.

Realistic Timeline Overview

| Phase | Duration | |-------|----------| | Preparation | 2-4 weeks | | Building pipeline | 2-4 weeks | | Active meetings | 4-8 weeks | | Due diligence | 2-4 weeks | | Negotiation & closing | 2-4 weeks | | Total | 3-6 months |

This assumes things go well. Add 50% for realistic planning.

Phase 1: Preparation (2-4 Weeks)

Before reaching out to investors, you need:

Materials to Prepare

1. Pitch Deck (10-15 slides)

• Problem
• Solution
• Market size
• Product
• Traction
• Business model
• Competition
• Team
• Financials
• The ask

2. Financial Model

• 3-year projections
• Key assumptions documented
• Unit economics breakdown
• Use of funds

3. Data Room

• Corporate documents
• Cap table
• Financial statements
• Key contracts
• IP documentation
• Team backgrounds

4. One-Pager

• Executive summary for cold outreach
• Can be understood in 60 seconds

Metrics to Have Ready

| Metric | What Investors Want to See | |--------|---------------------------| | MRR/ARR | Current and growth rate | | Customer count | And logo quality | | Churn | < 3% monthly | | CAC | And payback period | | LTV:CAC | > 3x | | Runway | Current months remaining |

Phase 2: Building Pipeline (2-4 Weeks)

Target List

Create a tiered list:

Tier 1 (10-15 investors)

• Perfect fit for stage, sector, check size
• Have invested in similar companies
• Active in your space

Tier 2 (15-25 investors)

• Good fit, maybe less active in your space
• Right stage and check size
• Less obvious connection

Tier 3 (20-30 investors)

• Possible fit
• Generalist investors
• New funds without track record

Warm Introductions

The ideal path:

Founder → Portfolio company founder → Investor partner

Hierarchy of intro quality:

1. Portfolio founder
2. Other founder investor knows
3. Investor's LP
4. Another investor
5. Lawyer/advisor
6. Cold outreach (rarely works)

Sequencing

Don't pitch your Tier 1 first.

Start with Tier 2/3 to:

• Practice your pitch
• Learn common questions
• Build social proof
• Refine messaging

Then hit Tier 1 when you're polished.

Phase 3: Active Meetings (4-8 Weeks)

Meeting Funnel

Typical conversion rates:

| Stage | Conversion | |-------|------------| | Intro request sent | 100 | | Intro made | 60 | | First meeting | 40 | | Partner meeting | 15 | | Due diligence | 5 | | Term sheet | 2 |

Expect to take 50+ first meetings for 2 term sheets.

Meeting Cadence

First meeting (30-45 min)

• Usually with associate or junior partner
• High-level pitch
• Qualification both ways

Second meeting (45-60 min)

• With decision-making partner
• Deeper dive on product/market
• More detailed questions

Partner meeting (60-90 min)

• Present to full partnership
• Multiple partners ask questions
• Final step before decision

Week-by-Week Schedule

| Week | Activity | |------|----------| | 1-2 | Tier 2/3 first meetings | | 2-3 | Tier 1 first meetings | | 3-4 | Second meetings | | 4-6 | Partner meetings | | 6-8 | Due diligence / decisions |

Run a tight process. Momentum matters.

Creating FOMO

Investors hate missing out. Create urgency:

• "We have strong interest from [firm]"
• "We're targeting closing by [date]"
• "We have a term sheet pending"

But never lie. The investor community is small.

Phase 4: Due Diligence (2-4 Weeks)

Once an investor is serious, they'll want:

Standard DD Requests

Financial

• Bank statements
• P&L, balance sheet
• Financial projections
• Revenue breakdown by customer

Legal

• Cap table and stockholder agreements
• Employment contracts
• IP assignments
• Material contracts

Technical

• Architecture overview
• Security practices
• Technical debt assessment
• Scalability plan

Commercial

• Customer references
• Churn analysis
• Pipeline data
• Competitive analysis

DD Red Flags to Fix Early

• 🚩 Unassigned IP from previous employers
• 🚩 Founder shares without vesting
• 🚩 Cap table messiness
• 🚩 Verbal equity promises without paperwork
• 🚩 Missing employee agreements
• 🚩 Corporate formation issues

Fix these before fundraising starts.

Phase 5: Negotiation & Closing (2-4 Weeks)

Term Sheet

Key terms to negotiate:

| Term | What to Watch | |------|---------------| | Valuation | Pre-money vs post-money | | Option pool | Size and timing (pre vs post) | | Liquidation preference | 1x non-participating is standard | | Board composition | Founder control at early stage | | Anti-dilution | Broad-based weighted average is standard | | Pro-rata rights | Standard, but can be capped |

From Term Sheet to Close

| Step | Time | |------|------| | Term sheet signature | Day 0 | | Drafting legal docs | 1-2 weeks | | Negotiating final docs | 1 week | | Final signatures | 1-2 days | | Wire transfer | 1-3 days |

Legal Fees

Budget for:

• Company counsel: $15-40K
• Investor counsel: Often paid by company ($5-15K)

Some investors cover their own legal. Others don't.

Critical Timing Factors

When to Start Fundraising

Months of Runway Remaining - 6 months = When to Start

If you have 12 months runway, start at 6 months remaining.

This gives you time to:

• Run a full process
• Have leverage (not desperate)
• Close before runway panic

Seasonal Considerations

| Period | Investor Availability | |--------|----------------------| | Jan-Feb | Slow start, Q1 planning | | Mar-May | Peak activity | | Jun-Jul | Summer slowdown | | Aug-Sep | Peak activity | | Oct-Nov | Year-end push | | Dec | Holiday hibernation |

Avoid starting a raise in December. Avoid needing to close in August.

Market Timing

External factors affect fundraising:

• Public market conditions
• Sector sentiment
• Recent exits in space
• Competitive funding news

These are largely out of your control. Focus on what you can control.

Calculate Your Fundraising Timing

Use our tools to plan your raise:

• Runway Calculator - Know exactly when you need to raise
• Dilution Simulator - Model different term scenarios
• Equity Calculator - Understand your stake after the round

Key Takeaways

1. Start earlier than you think - 6 months minimum before you need money
2. Sequence your meetings - practice with Tier 2/3 first
3. Expect 50+ meetings - funnel math is brutal
4. Create urgency - but don't lie
5. Terms matter beyond valuation - watch preferences and control

Related Reading:

• Startup Valuation Methods
• Cap Table 101
• Burn Rate Guide