Let's be real: fundraising can feel like trying to land a 747 on a postage stamp while simultaneously reciting the periodic table backward.
It's a high-stakes, time-consuming dance that requires more than just a great idea and a healthy dose of caffeine.
It requires readiness.
So, before you swap your comfy startup hoodie for a painfully starched "pitching shirt" and start dialing up every investor with a pulse, take a breath.
Pour yourself another coffee (or something stronger, I don't judge). It’s time for a brutally honest self-assessment.
Jumping into the fundraising pool too soon is the fastest way to get a cold splash of reality and waste months you could have spent building a better product.
Just this week I had an exchange with a startup founder who was looking to consult with me about fundraising for his idea.
So, I sent him the three questions I ask every founder I talk to:
- Do you have a live product/service?
- Is the business creating revenue yet?
- Do you have any issued patents?
With just those three questions I can tell if you are ready to fundraise.
Here’s why each matters.
Do you have a live product/service?
This question acts as my BS meter. Too many times I talk with founders that have ideas and zero action.
It is easier now than ever to quickly build out a live product and get it into the market.
Unless you are the type to overbuild. Don’t be that type.
Build out the simplest version of your product and get it out into the market.
Not only is this critical for gathering user feedback, so you can improve the product, but it let’s you validate demand.
Is the business creating revenue yet?
There is no better validation of a new venture than getting paid.
I don’t care how many people tell you its a cool idea. That’s not enough validation.
The best form of validation is when people are willing to exchange their hard-earned money for your product.
The question is - how much revenue is enough to interest investors?
Less than you think.
I’ve seen startups with less than $100k in ARR get funding.
The point is that revenue equates to validation of demand, and more importantly that you can sell.
Do you have any issued patents?
Notice that I said issued patents. Not provisional patents.
Anyone can file for a provisional patent.
Issued patents are when the patent office has agreed that you have a novel, patentable idea and they assign that a patent number.
Investors love patents because they make a product more defensible.
Green light/Red light
Yes to all three = Green light.
Yes to a few = Yellow light.
Otherwise = Red light.
If the answer is no to these then its a red light and you need to find ways to check off more milestones.
Focus first on getting your product, at least a minimal viable version of it, live and in the market.
That could be a simple version of your app built using a vibe coding solution or a simple landing page that talks about your product and converts visitors into sales.
Final Thoughts
Based on my experience, these three questions are the quickest way to gauge your fundraising readiness.
But, let me be clear. Attracting investors is more complicated that just those three questions.
They are just a starting point.
If you are curious how ready you are to fundraise, check out my Investor Readiness Quiz.