This is a concise roadmap to help founders navigate the fundraising journey, from pre-seed to IPO. It provides actionable insights into funding sources, equity dilution, pros and cons, best practices, and common pitfalls, enabling founders to make informed decisions at every stage. Note: Beyond securing capital, fundraising is about finding strategic partners who align with your vision and can drive long-term growth.
| Stage | Funding Source | Funding Bodies | Equity Dilution | Pros | Cons | Key Pitfalls | Best Practices | Essential Materials/Metrics | Typical Timeline |
|---|---|---|---|---|---|---|---|---|---|
| Pre-Seed | Self-Funding/Bootstrapping | Founders’ personal savings, credit cards, loans | 0% | - Full control - No equity dilution - Low operational costs |
- Limited capital - High personal financial risk |
- Overestimating financial capacity - Skipping market validation |
- Maintain lean operations - Focus on MVP - Keep finances separate |
- Prototype - Lean canvas - Basic financial projections |
NIL/time to required to save for MVP |
| Friends & Family | Friends, family members | 5-15% | - Quick access to funds - Flexible terms |
- Risk of strained relationships - Limited business expertise |
- Lack of formal agreements - Unrealistic expectations |
- Use formal agreements - Be transparent about risks |
- Pitch deck - Financial projections - Clear repayment terms |
1-3 months | |
| Crowdfunding (Rewards/Donation) | Kickstarter, Indiegogo, GoFundMe | 0% | - Market validation - Community engagement - Flexible funding |
- Time-consuming - Reputational risks if unsuccessful |
- Underestimating costs - Overpromising results |
- Set realistic goals - Budget for marketing - Manage timelines |
- Video pitch - Prototype - Rewards structure |
1-3 months (campaign) | |
| Pre-Accelerators | Founder Institute, Seedstars, regional programs | 0-5% | - Guidance and mentorship - Networking opportunities |
- Limited capital - Less comprehensive than accelerators |
- Misaligned program choice - Underutilizing mentor support |
- Choose industry-specific programs - Leverage mentor relationships |
- MVP or prototype - Initial market research |
1-3 months (program) | |
| Antler | Antler (Global early-stage VC firm) | 5-10% | - Helps form co-founding teams - Provides early-stage funding |
- Early dilution - High personal commitment required |
- Misaligned team dynamics - Unrealistic expectations |
- Build strong co-founder relationships - Clarify long-term vision |
- Team formation - Initial product/market fit analysis |
3-6 months (program) | |
| Entrepreneur First (EF) | Entrepreneur First (EF, operates globally) | 5-10% | - Focus on individuals before they have an idea - Strong network |
- High risk with no product or idea yet - Intense program pace |
- Difficulty forming viable business models - Losing momentum |
- Be prepared for rapid iteration - Focus on team building |
- Team profiles - Early-stage business ideas - Market research |
3-6 months (program) | |
| Seed | Angel Investors | Angel networks (e.g., AngelList), local angel groups | 15-25% | - Expertise and mentorship - Strong network access |
- Small investment amounts - Multiple investors to manage |
- Overvaluation - Ignoring deal terms |
- Leverage networks - Focus on strategic value-add |
- Traction metrics - Go-to-market strategy - Cap table |
3-6 months |
| Seed VC Firms | Y Combinator, 500 Startups, Techstars | 15-30% | - Larger funds - Mentorship and resources - Growth support |
- Stringent due diligence - Potential loss of control |
- Misaligned expectations - Focus on fundraising over execution |
- Build relationships early - Demonstrate growth potential |
- Financial projections - Product roadmap - Market analysis |
4-8 months | |
| Accelerators | Y Combinator, Techstars, 500 Startups | 5-10% | - Structured growth programs - Demo day exposure - Peer learning |
- Intense and time-consuming - Limited customization |
- Over-reliance on accelerator network - Short-term focus |
- Maximize mentor relationships - Plan for sustainable growth |
- KPIs - Refined pitch - Product-market fit evidence |
3-6 months (program) | |
| Series A | Venture Capital | Sequoia Capital, Andreessen Horowitz, Accel | 20-30% | - Significant capital for scaling - Institutional support |
- High growth expectations - Complex deal structures |
- Premature scaling - Ignoring unit economics |
- Focus on scalability - Demonstrate path to profitability |
- CAC vs. LTV - MoM growth metrics |
4-8 months |
| Corporate Venture Capital | Google Ventures, Intel Capital, Salesforce Ventures | 15-30% | - Strategic partnerships - Industry insights |
- Potential conflicts of interest - Slow decision-making |
- Over-reliance on a single partner - Missed other opportunities |
- Align on long-term strategy - Retain operational autonomy |
- Strategic fit analysis - Partnership roadmap - Competitive landscape |
3-6 months | |
| Series B | Venture Capital | Later-stage VCs, growth equity firms | 15-25% | - Large capital infusions - Scaling expertise |
- Higher dilution - Pressure for rapid scaling |
- Unsustainable growth - Cultural dilution |
- Focus on efficient growth - Build scalable processes |
- Cohort analysis - Expansion metrics |
4-8 months |
| Private Equity | Growth equity firms, late-stage VCs | 10-30% | - Significant capital for expansion - Operational expertise |
- Risk of losing control - Exit pressures |
- Misalignment on growth vs. profitability - Overvaluation |
- Align on vision - Focus on long-term goals |
- Financial models - Market penetration strategies |
6-12 months | |
| Series C+ | Late-stage VC/Private Equity | Tiger Global, SoftBank Vision Fund | 10-20% | - Large funding rounds - Global expansion potential |
- Market leadership pressure - Complex deal structures |
- Overexpansion - Losing focus on core business |
- Balance growth and profitability - Prepare for IPO/exit |
- Market share - Profitability projections |
6-12 months |
| Crossover Investors | Fidelity, T. Rowe Price | 5-15% | - Bridge to public markets - Increased credibility |
- Public company scrutiny - Pressure for liquidity events |
- Focusing too much on short-term performance - Ignoring long-term strategy |
- Implement strong reporting - Maintain long-term vision |
- Audited financials - Quarterly reports - Governance structures |
3-6 months | |
| IPO | Public Market | Investment banks (e.g., Goldman Sachs, Morgan Stanley) | Varies (10-20%) | - Access to large capital pools - Increased public exposure |
- Intense regulatory scrutiny - Pressure for performance |
- Underpricing/overpricing - Distraction from core business |
- Build a strong management team - Establish robust financial controls |
- Audited financials - S-1 filing - Investor roadshow materials |
6-12 months |