Fundraising Process

Fundraising Process

Fundraising lifecycle from pre-seed through Series B, stage benchmarks, 8-week execution timeline, and preparation checklist.

How It Works

┌─────────────────────────────────────────────────────────────────┐
│                  FUNDRAISING PROCESS                             │
├─────────────────────────────────────────────────────────────────┤
│  Information Provided                                           │
│  ✓ Lifecycle by stage: Pre-seed → Seed → Series A → Series B  │
│  ✓ Stage benchmarks: traction, valuation, check size, dilution│
│  ✓ 8-week timeline: execution plan by week                     │
│  ✓ Prep checklist: pitch deck, financial model, data room     │
│  ✓ Common mistakes & anti-patterns                            │
└─────────────────────────────────────────────────────────────────┘

Fundraising Stage Lifecycle

Pre-seed

Characteristics:

• Idea → early product
• Founder-led, Friends & Family, angels
• Invest in team and vision, not validation

Typical Benchmarks:

Focus at This Stage:

• Validate problem-solution fit
• Build MVP
• Acquire first customers
• Assemble team

Seed

Characteristics:

• Search for product-market fit
• Seed funds, angels, some VCs
• Need to prove initial traction

Typical Benchmarks:

Focus at This Stage:

• Achieve product-market fit
• Build repeatable customer acquisition channel
• Prove early unit economics
• Expand core team

Series A

Characteristics:

• Prove PMF → start scaling
• Institutional VCs, lead investor required
• Repeatable business model

Typical Benchmarks:

Focus at This Stage:

• Build repeatable growth engine
• Demonstrate unit economics health
• Create scalable GTM
• Build leadership team

Series B

Characteristics:

• Prove scale → market leadership
• Large institutional VCs, growth funds
• Establish competitive advantage

Typical Benchmarks:

Focus at This Stage:

• Establish market leadership
• International expansion or new markets
• Expand product lines
• Scale organization

8-Week Fundraising Timeline

Pre-Execution (Week -4 ~ -1)

Week -4:
□ Define fundraising strategy (target amount, dilution, investor types)
□ Start IR material prep (pitch deck, financial model, data room)
□ Request intros from existing investors/advisors
□ Start deal sourcing (build target VC/AC list, ~100)

Week -3:
□ Complete pitch deck v1
□ Finish financial model (3-scenario)
□ Draft data room (incorporation, contracts, IP)
□ Thesis matching → prioritize 30 target investors

Week -2:
□ Practice pitch (with advisors, mentors, friends)
□ Prepare 30 anticipated Q&A
□ Complete data room
□ Start securing warm intros (top 10 priority targets)

Week -1:
□ Final pitch deck version
□ Confirm 10 warm intros
□ Prepare outreach sequence (Day 0/5/10/21)
□ Verify runway (minimum 6 months)

Execution Phase (Week 1 ~ 8)

Week 1: Launch Outreach
□ Contact top 20 priority investors
□ Send 10 warm intros
□ Send 10 cold emails
□ Start tracking response rates

Week 2: Early Meetings
□ First partner meetings: 5-10
□ Collect feedback, adjust pitch
□ Add 20 more follow-up outreach
□ Confirm 3x pipeline coverage

Week 3-4: Accelerate Meetings
□ Partner meetings: 10-15/week
□ Identify interested investors (3-5)
□ Request partner consensus meetings
□ Update DD materials

Week 5-6: Conduct Due Diligence
□ DD with 3-5 interested investors
□ Provide data room access
□ Handle reference checks
□ Confirm lead investor

Week 7: Term Sheet Negotiation
□ Receive term sheet from lead investor
□ Legal review (lawyer required)
□ Negotiate conditions
□ Secure final commitments from other investors

Week 8: Closing
□ Sign term sheet
□ Complete final paperwork (SPA, SHA)
□ Wire funds received
□ Prepare public announcement

Stage-Specific Prep Checklist

Pitch Deck (Required)

□ Cover slide (company name, tagline, logo)
□ Problem (3 key pain points)
□ Solution (product screenshots, key features)
□ Market opportunity (TAM/SAM/SOM)
□ Product (demo, customer flow)
□ Traction (key metrics, growth chart)
□ Business model (revenue structure, pricing)
□ Competitive analysis (positioning map)
□ GTM strategy (channels, CAC, LTV)
□ Team (founders, key members, advisors)
□ Financial forecast (3 years, 3-scenario)
□ Investment ask (amount, use of funds, milestones)

Appendix:
□ Detailed financial model
□ Product roadmap
□ Customer case studies/references
□ Detailed competitive comparison

Financial Model (Required)

□ 3-scenario (Base/Bull/Bear)
□ 5-year P&L (monthly first 2 years, quarterly remainder)
□ Revenue model (cohort-based)
□ Cost structure (COGS, S&M, R&D, G&A)
□ Unit economics (CAC, LTV, Payback)
□ Cash flow & runway
□ Use of funds plan
□ Key assumptions documented

Data Room (DD Stage)

□ Corporate Documents
  - Articles of incorporation, cap table, shareholder list
  - Previous investment agreements (SAFE, convertible notes, SPA)

□ Financial Info
  - Income statement (monthly, past 2 years)
  - Balance sheet
  - Bank statements

□ Contracts
  - Customer contracts (top 3-5)
  - Vendor contracts
  - Lease agreements

□ IP & Legal
  - Patents, trademark applications
  - Open source license audit
  - Founder vesting agreements
  - Employee IP assignment agreements

□ HR
  - Organizational chart
  - Key team member resumes
  - Stock option pool

□ Product
  - Product roadmap
  - Technical architecture documentation
  - Security certifications (if any)

Fundraising Pipeline Management

3x Coverage Rule

Fundraising is a funnel. Low conversion rates require sufficient pipeline.

Conversion Rate Benchmarks:
- Discover → Contact: 50-70%
- Contact → Meeting: 20-30%
- Meeting → DD: 30-40%
- DD → Term Sheet: 20-30%
- Term Sheet → Close: 70-90%

Overall Conversion: 1-3%

Example:
Target: $2M, avg check $500K → need 4 investors
3x coverage: 12 in DD stage
Work backward: 40 meetings, 130 contacts, 200 discovery

Pipeline Stage Management

Common Mistakes & Anti-Patterns

❌ Mistake 1: Start Too Late

Problem: Start when only 3 months of runway left Why risky: Fundraising = 4-8 months; rushing leads to bad terms

Right Approach:

• Start prep when 12 months runway remains
• Begin outreach when 9 months runway left
• Maintain 6-month buffer

❌ Mistake 2: Insufficient Pipeline

Problem: Only 2-3 interested investors in conversation Why risky: Lose fails

Right Approach:

• Maintain 3x coverage
• Engage minimum 12 investors in parallel
• Continuous deal sourcing

❌ Mistake 3: Under-Prepared Materials

Problem: Only pitch deck; no financial model or data room Why risky: DD delays → lost investor confidence

Right Approach:

• Prepare all materials starting Week -4
• Organize data room early
• Prepare answers to 30 anticipated questions

❌ Mistake 4: Wrong-Fit Investors

Problem: Approach "any VC" Why risky: Response rate < 5%, waste of time

Right Approach:

• 4-dimension thesis match (sector·stage·check·geography)
• Focus on HIGH fit only
• Use portfolio reverse sourcing

❌ Mistake 5: No Lead Investor

Problem: Multiple investors say "follow-on" only Why risky: No lead = round doesn't close

Right Approach:

• Secure lead investor first (check size 50%+)
• Finalize lead terms (term sheet, valuation)
• Then recruit follow-on investors

❌ Mistake 6: Valuation Obsession

Problem: Maximize valuation, ignore bad terms Why risky: Bad terms (high liquidation preference, ratchet) cause bigger problems later

Right Approach:

• Balance valuation + terms
• Check liquidation preference, anti-dilution, participation
• Maintain long-term cap table health

Korea-Specific: Government Programs (TIPS, K-Startup)

Government Programs

Strategy:

• Combine private VC + government programs
• Government support = non-dilutive capital
• Note: More reporting and obligations required

Related Skills and Commands

• deal-sourcing — Investor discovery methodology
• investor-research — Deep research on specific VC
• pitch-craft — Pitch deck structure & storytelling
• financial-modeling — 3-scenario financial modeling
• term-sheet-knowledge — Understand term sheet conditions
• /daily-fundraise — Daily fundraising briefing
• /lead-dashboard — Investor pipeline status
• /fundraise-forecast — Fundraising forecast