5 fundraising tips from renowned VC Fred Wilson

Mar 25, 2025

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Today’s fundraising tips come from Fred Wilson, co-founder of Union Square Ventures, one of the top venture capital funds in New York City. USV has invested in companies like Twitter, Tumblr, Etsy, and Kickstarter, among many others.

Here are some of his best tips for startups on fundraising:

Raise enough during the "Hopes and Dreams" phase: "Your company will be worth more to investors during the hopes and dreams phase than it will be worth while you are crossing the chasm. So you should raise enough capital at hopes and dreams valuations to get across. If you don't, a down round is waiting for you as yet another challenge."
The CEO is always fundraising: "Fundraising is a process, not a campaign, and it needs to be part of a CEO's daily cadence and calendar. You are never not raising money when you are running a company or any sort of business endeavor that requires capital."
Don’t strive to get more funding than your competitors: "Do not let the fact that your competitors are raising money impact your decisions around fundraising. I have not seen one company beat another because they raised more money. Most of the time it is the other way around—the overfunded company loses most of the time."
Stay focused on building your business: "Focus on your business, your product, your team. Put all this stuff in perspective and don't let it take your mind off what matters. You need money to build a business, but the money is a tool; the business is the mission."
Learning Through Rejection: "The fundraising process, and all of that rejection, helped harden our investment thesis to great effect. You learn something from all of that rejection—it helps refine your pitch and clarify your vision."

References/recommended deep dive: Fred Wilson has a great blog with plenty of fundraising advice for founders. In particular: How Much Money to Raise; The long raise; From hopes and dreams

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