How to Successfully Raise Institutional Funding

To win at any game, you need to know how. Raising early stage institutional funding is no different. 

In order to validate your startup’s business model and de-risk the investment opportunity for investors, the goal of your seed to Series A journey is to achieve ever higher degrees of product-market fit (PMF). PMF means people are buying it, loving it and telling their friends about it. 

Throughout your seed journey, your focus is to build traction with early adopters. They’re your market champions. They’ll teach you more about your solution than your technical team can: how real people interact with your solution, how you should talk about it, what’s truly awesome about it, and what needs improvement. The data you gather is essential for building momentum.

You might even discover that the market you thought to win over isn’t the right one for your business (hint: time to pivot!). Identifying that early can prevent you from burning fuel going down the wrong road.

You might end up having more than one seed round, but by Series A, you’re aiming to show investors a mature business model, that your early adopters are the tip of your target market’s iceberg, and that your traction has growing momentum – enough to springboard into strong market capture. 

How to Get to PMF?  GTM Strategy 

Go-To-Market is one of the most important pieces to solving your fundraising puzzle. Why? Many founders treat GTM as a static part of the business plan and a necessary slide in the deck. It’s included because it needs to be there, but isn’t applied in a meaningful way. And 90% of startups fail on the way to Series A. Go figure. 

To avoid that being your story, reframe your understanding of the role GTM plays in growing your startup and securing institutional investment. GTM is a verb, not a noun. It’s not a snapshot, but a motion picture with strong degrees of product-market fit as the closing act. 

GTM is the process you deploy to achieve PMF. VCs look for PMF opportunities to invest in. 

Successfully navigating institutional fundraising isn’t easy, but your experience need not be one of constant doubt. 

If you liked this post, stay tuned for my next ones, where I take deeper dives on how to build an initial GTM plan and why GTM never stops. 

Yours sincerely,
Vineet

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