INVESTMENT 101 - START HERE
Most founders don’t have a background in finance. They’re usually passionate people with deep expertise in their niche, and see an opportunity in the market. If you’re learning about finance while running a business, it’s completely normal. If investment feels confusing, you’re not alone.
Before you decide to raise, one of the first questions to ask yourself is: Should I be raising at all?
So many people jump into fundraising as if it’s the only path. It was a real eye-opener for me when I showed an investment deck to a friend who was an ex-VC, and he asked, “Are you sure you should even be fundraising with your model?
Gut punch. Touché, Daniel. This was after working full time on securing investment for 6 months, and NO ONE else had asked me that. I made the mistake, so you don’t have to!
So, be honest, are you raising because you’re haemorrhaging cash?
Well, hate to break it to you, but you need to fix that first.
OK, so you’ve thought it through and decided fundraising is the right move. Let’s start with the basics:
1. What are you raising?
Start with the type of raise. At early stage, it’s usually one of:
Equity – you give investors a percentage of your business
SAFE / ASA – a simplified agreement where equity is converted later
Debt – less common pre-profit, but includes startup loans and convertible notes
If you’re UK-based, most early-stage raises will be under the SEIS or EIS schemes, the UK’s tax relief incentive that make it A LOT more attractive for investors to back you.
2. How much are you raising and why?
You can’t just pluck a number out of the air. Build a model that shows:
How much do you actually need to reach the next milestone
What will it cost to get there
How long should that cash last
Investors want to know where their money is going. Be specific.
3. What’s your valuation?
If you’re raising equity, you need to agree on a valuation — what your business is worth. This affects how much of it you’re giving away.
At early stage, valuation is based on:
Market potential
Traction
Team
Comparable deals
Be realistic. You can’t justify a £10M valuation on an idea alone. Even if you manage to raise at a high valuation, it can cause problems at your next round. It has to make sense. Real cash is usually the most valuable thing in the business, so manage your expectations.
4. What do investors want to see?
You don’t need perfect numbers, but you do need proof. That might be:
Product in market
Paying customers
Strong retention or conversion
A clear plan to scale
Early-stage investors back the team and the traction. They want to see that you know your stuff and that the business has legs.
5. What happens after the raise?
Investment isn’t free money. It comes with expectations. You’ll need to:
Hit targets
Report regularly
Stay on track for your next raise or route to profitability
Be honest about whether you want that pressure — and whether the business is ready for it.
Final thoughts
Raising money is not a badge of honour. It’s a tool. Sometimes it’s the right one. Sometimes it isn’t.
If you’re not sure whether to raise, how much, or on what terms, get help. A few smart decisions early can save you a lot of pain later.
I work with founders to build investor-ready decks, refine their strategy, and raise the right way. If you’re thinking about fundraising, get in touch.