can you turn interest into cash?
fundraising readiness boils down to one simple question:
"if an investor became interested tomorrow, could you turn that interest into a check?"
and let’s agree early on: you have a deck ≠ you’re ready, ok? I’m glad we cleared that out.
getting ready might (/always does) feel overwhelming. here's a simple self-check to make it easier:
1. can you explain the company in one sentence?
keep in mind, you are talking to someone who’s never heard of you before, so things like "we're an ai-powered platform revolutionizing how businesses..." won’t do.
be specific and to the point, try the good old: "we help x do y without z."
an investor should understand what you do within roughly 30 seconds.if explaining the company requires five minutes of context, your positioning most probably isn't ready yet.
2. do you know exactly who desperately needs this?
don’t say: "we sell to SMBs" - that’s not a defined ICP.
do say: "SMB’s marketing teams who are taking a new product to the market and are looking for partnerships".
the narrower answer is often much more convincing, because it introduces natural constraints that you’ll use as a frame for your go-to-market notion.
in other words, you should be able to explain:
who has the problem?
what triggers them to look for a solution?
how painful is it?
what are they doing instead for now?
3. do you have evidence that the problem is real?
at pre-seed, investors aren't necessarily expecting meaningful revenue. but they will expect to see some evidence / traction. that could be:
- customer interviews
- LOIs (keep in mind they rarely convert, so it’s not the strongest one on the list)
- design partners
- paid / unpaid pilots
- usage
- waitlist
- initial revenue
- retention
- customers repeatedly asking for something
"we believe people want this" is very different from "12 companies are already testing our solution, 3 companies are paying for it".
4. can you explain why your traction is impressive?
let’s try to turn a number into a number that will tell a story. in other words, let’s add the context that speaks progress and velocity:
$0 → $15k MRR in two months
80% of customers came through referrals
12 paying customers with zero paid acquisition
3 customers expanded within their first six months
5. can you explain why now?
imagine your company could have been built in exactly the same way in 2014, e.g., it’s a B2B SaaS solution.the very first question to expect here: why hasn't somebody already won this market?
something should have changed: technology, regulation, customer behavior, costs, infrastructure, distribution, a new category, a unique market change - what is it?
"AI is changing everything" isn't automatically a good enough answer - take a step further and ask “and then what?” if you can showcase that there’s something you know / understand that others don’t, that’s your good answer. and please make sure you can support it with strong evidence.
6. can you explain why you?
other versions of this question:
+ why are you unusually well positioned to win?
+ why your team, what makes it unique?
+ why should i believe this particular team can pull this off?
and this is the case when "I've always been passionate about this problem for months / years" is not enough. investors are looking for network, deep market understanding, and ability to win where others can’t.
7. can you explain how this becomes a very large company?
in other words, “can you explain how you’re about to make money?”it’s important to see the real question behind the stated question, so you won’t answer with "this is a huge market" instead of "we can build a huge company in this market." a big difference.
your TAM slide is important, but it doesn't do all the work here. here’s what does:
- where you start (the market segment)
- who buys first (the smallest ICP segment possible)
- how much they pay (pricing and competition)
- where you expand next (growth path)
- why the opportunity gets significantly bigger over time (now we are talking about the market size and opportunity)
8. do you know exactly what you're raising for?
"we're raising $2m for 18 months of runway" is the most common mistake. it’s ok - you’re the founder, you have to think about the runway. but now try to put yourself into investor’s shoes: are they financing your process? are they financing your attempts to figure things out? nope.
they are putting money in to see results. so let’s try to make that sentence work:
"we're raising $2M to achieve $2.5M in ARR in 18 months".and make sure you’re ready to explain how exactly you’ll get there.
9. have you pressure-tested the uncomfortable questions?
getting the questions after the pitch is the whole game: you can’t put absolutely everything to the pitch, so you say just enough to open the further conversation. meaning, if you’re getting meaningful and even nasty questions afterwards, it’s a sign you’re doing a great job.
now the task is to get ready for them. remember: there’s always a “real” question behind every question you’re getting. investors’ goal is simple: de-risk the investment as much as possible, so they’ll be digging deeper if interested. examples:
- why is growth slowing?
- why did that customer churn?
- why won't OpenAI / Google build this in 6 months?
- why is your co-founder part-time and when would they go full-time?
- why are you raising now?
- what happens if you can't raise another round?
if there's an elephant in the room, assume investors can see it and address it early on: you will want to have only the smartest and most capable people on your cap table.
10. is the fundraising machine actually ready?
finally, the boring stuff - here’s what you should have before you jump on the calls to be able to move fast:
a clear narrative that you’re able to present in 3-5 minutes.
a deck - test it heavily before sending to a16z.
a financial model - a simple and appropriate for your stage one, not a fake five-year fantasy.
a data room - organized before investors start asking, it takes much longer than you think it would.
an investor pipeline - remember you’ll have to get about 80 conversations before the round is closed.
your outreach strategy - warm intros, cold outreach, existing relationships, etc.
your answers to common investor questions - have a structure, that would be enough.
a follow-up system - think about fundraising as about a sales cycle, that usually helps.
and one more thing: please never start with your favorite investor. start with several investors you would genuinely take money from → learn what questions keep coming up → improve the pitch, and then move toward your highest-priority investors on your list.
tldr: the simplest test ever is to ask yourself three things:
- can I explain it?
- can I prove it?
- can I defend it?
if you can explain it but can't prove it → take a step back and get more evidence.if you can prove it but can't explain it → fix the narrative, ask for help if needed.if you can explain and prove it but fall apart under questioning → pressure-test the raise.
and if you can do all three, you're probably much closer to being ready to raise than founders who simply "finished their deck."