Raising VC money is a bit like walking a tightrope: swing too far one way, and you’ll become underfunded and stunted in growth; sway too far the other way, and you’ll become overfunded, scaring off angel investors and the VCs themselves. But there can be a happy medium, and a few tradecraft techniques will help you find it.

🫙 Start low, create competition

Most founders aim high, which results in VCs bidding them down. This backfires. Instead, anchor low. Here’s why: a lower ask brings in more VCs, creating an auction dynamic. Once VCs are emotionally committed, they will compete with each other to win your company, driving up the amount (and your valuation). 

Example: Instead of asking for $15M upfront, aim for $6-7M. This perceived bargain gets VCs excited and invested, leading them to drive your valuation up as they compete.

🏹 Prioritize essentials

Pinpoint your critical milestones for the next round of funding. What needs to be proven to show meaningful traction? Kill all the rest. 

🛝 Bootstrap smartly

Bootstrap whenever you can. Purchase items on the cheap and take advantage of free resources. Do whatever you can to stretch your budget and lower overall funding requirements.

⛳️ Phase your funding

Quarterback your fundraising in phases. Raise just enough to accomplish what’s immediately needed, and return to investors with proof that you can make progress – not just promises of what you might do if fortunate enough to get additional capital. It keeps you nimble.

🍴 Cut non-essentials

Review your budget. Cut non-essential expenses to significantly lower your funding needs.

🍹 Leverage partnerships

Enlist strategic partners that provide goods or services on a cheaper basis or with equity. This reduces your capital requirements while letting you grow..

If you can’t secure any money even with a lower ask, then you might not have the right kind of asking price. Scrap everything and start over. So rebalance, get your smiling face out there, and nail that offer! If you find that you can’t find the funds, you know it’s time to do some soul-searching, get face-to-face with your investors, and find out what the real problems are.