Insights on raising

Our team writes from the raises it has run. Much of it is about why investors lose confidence partway through.

Model it. Not the headline: your own proceeds, at three exit values, under the actual terms offered. (read where we wrote it)

17Pieces from our team on raising

Where is your raise now?

Before the raise

In the room

Diligence and closing

Why do investors lose confidence partway through a raise?

Sriram ChidambaramThe rigour you skip on revenue this year becomes the credibility you lack in the room next year.
From "Fundraising rigour vs revenue rigour"
CS Manavi AroraA 1x non-participating preference is the founder-friendly standard. The investor chooses between taking their money back and converting to share in the proceeds like any ordinary shareholder.
From "A term sheet is two pages. It decides the next ten years of your company."
CA Mallavarjalla MounikaThe truth is that fundraises rarely fail in diligence. They fail before diligence ever begins. Diligence is just the moment when the failure becomes visible.
From "Fundraises Don't Fail in DD: They Fail Before It"
Karthik BeknalA higher valuation with aggressive terms can leave you worse off than a lower one with clean terms, and nobody finds that out until the exit, when it is arithmetic rather than negotiation.
From "Liquidation preference and anti-dilution, with the maths"
CA Mallavarjalla MounikaA gap an investor discovers tends to become a price discussion. The same gap, disclosed and explained by management, is far more often treated as a known item than as a reason to renegotiate.
From "Don't wait for the investor to find the problems. Find and fix them before the investor does."
CA Mallavarjalla MounikaThe investor was not introducing new problems into the deal. They were surfacing problems that already existed inside the company, that nobody had looked at carefully, and that the founder did not realize were going to matter at this scale of conversation.
From "Fundraises Don't Fail in DD: They Fail Before It"
CA Mallavarjalla MounikaThe most expensive moment in a fundraise is rarely the rejection at the end. It is the quiet moment, somewhere in the middle of due diligence, when an investor's confidence starts to slip.
From "Why Investors Lose Confidence Mid-Process"
Sriram ChidambaramWhat causes delay, renegotiation and occasionally a dead deal is almost never the company's performance.
From "Diligence readiness: what we check, and what we find"
Sriram ChidambaramKeep the data room warm. Keep the numbers bridging on demand. Send honest, regular investor updates, so that when a round begins, the relationship and the record are already there.
From "Investors don't fund your numbers. They fund their confidence in your numbers."
CA Mallavarjalla MounikaWhich numbers in the deck cannot be defended by the underlying systems, and which need to be rebuilt before the round?
From "Why Investors Lose Confidence Mid-Process"
CA Mallavarjalla MounikaWhat is the real reason we win deals, and is it the reason our deck claims?
From "Commercial DD: Testing the Business Model Under Scrutiny"
CS Manavi AroraEvery one of these is avoidable with two weeks of preparation before you go out to raise.
From "From term sheet to money in the bank"
Sriram ChidambaramMost companies treat fundraising as an event. They scramble a data room together when the process starts, and take it apart when the cheque clears. That scramble is precisely where the weeks and the valuation leak away.
From "Investors don't fund your numbers. They fund their confidence in your numbers."
CA Mallavarjalla MounikaThe day you open your data room is too late to start asking what is in it. The discipline is to know what is in it months earlier.
From "DD Is Not the First Time You Should Look at Your Business"
CA Mallavarjalla MounikaIf our deck and our data room were read by two different people, would they describe the same company?
From "What Due Diligence Actually Evaluates (Beyond the Data Room)"
Sriram ChidambaramEnterprise value isn't built on a founder's confidence. It's built on numbers that hold up when someone who doesn't trust you examines them.
From "Below ₹20 crore, you can run on gut. Above it, gut starts to lie to you."
Sriram ChidambaramThe irony is that investors don't actually fund your numbers. They fund their confidence in your numbers. And nothing builds that confidence, or destroys it, faster than whether the revenue you promised last time showed up the way you said it would.
From "Fundraising rigour vs revenue rigour"
Sriram ChidambaramHow you keep your numbers is evidence of how you run your company. A three-week close and a data room assembled the night before tell them something about operational maturity that no headline metric can hide.
From "Investors don't fund your numbers. They fund their confidence in your numbers."