You'll need more time than you think to raise capital - with Barak Peled

Many startup founders find themselves surprised by the amount of time needed to raise their current round. When the markets are tough and the available capital in the market diminishes, it can take longer than ever. So you need to plan accordingly. 

Barak Peled is a serial entrepreneur and an angel investor, and the founder of DR Ventures, an early-stage advisory focused on capital raising, financial modeling and commercial strategy. 

Barak was a guest on our podcast a while back (you can listen to our conversation here). We reached out to him to get his best tips for startups raising capital in the current market environment. 

Here are his five tips for success:

1. You’ll need more time than you think: In the current market, fundraising can take much longer than expected, sometimes up to a year. You should prepare for this both mentally and financially. If needed, keep your job, or raise from friends and family.

2. Be ready with your “fundraising package”: Have a comprehensive and well-prepared fundraising “package”, including a good pitch deck, a financial model, a commercial go-to-market strategy, and a small data room with relevant information like bank account details, company incorporation documents, and contracts or letters of intent from potential clients.

3. Target the Right Investors: Get a clear understanding of why an investor might invest in your startup now. Use that to identify the profile of investors who are likely to invest in your company by considering factors such as your stage, sector, verticals, the amount of money you’re raising, and your location. Create a list of potential investors that meet these criteria and work your way through the list. 

4. Study Your Investors: Go through your list of potential investors and go deeper. Try to understand what drives them and learn about their experience and connections. 

5. Reach out in a personalized manner: Use the information you gathered to personalize your emails. Mention specific details that show you’ve done your homework. For example, highlight their past investments or companies they’ve founded or exited, and explain why you believe your startup aligns with their investment strategy. Even if you can only send a few personalized emails each week, it’s more effective than sending a large number of generic messages.