Why Fundraising Is Not a Waste of Time
Ask any founder what they dread most, and fundraising will likely top the list. Many view it as a frustrating process that takes time away from "real" work. But here’s the reality: it's not that fundraising is a distraction.
It's that fundraising is the ultimate sales test. If you’re struggling to articulate your value proposition, it’s a sign that your messaging might not resonate with customers either.
The best way to secure funding is to give investors exactly what they need to make a decision. Customers are no different—they won’t dig through unclear details to understand your value. Refining your pitch is more than a fundraising skill; it’s foundational to building a business that scales.
1. If You Can’t Sell to VCs, You May Struggle to Sell to Customers
Selling your startup to investors is no different from selling your product to customers. Both require you to:
- Identify the problem you’re solving.
- Explain how your solution uniquely addresses that problem.
- Build trust and credibility.
If investors find your pitch unclear or unconvincing, how will you succeed with customers who are even less invested in understanding your technology?
Fundraising forces you to refine your messaging, simplify your value proposition, and focus on outcomes instead of jargon—all essential skills for attracting and retaining customers.
2. Funding as a Strategic Market Test
The questions investors ask often reflect the concerns your target market will have:
- "How are you different from competitors?"
- "What do you charge?"
- "What problem do you solve, and is it worth paying for?"
If you’re struggling to answer these questions during a pitch, you’ll likely face the same challenges in a sales call. While investors may not always be right, their feedback often highlights gaps in your thinking. They’ve seen countless startups and recognize patterns you may not. Consider their feedback carefully—it’s an opportunity to strengthen your business model and refine your approach.
3. Clarity Trumps Complexity
Founders often feel compelled to say too much, thinking their product won’t speak for itself. This leads to overcrowded pitches and websites that overwhelm rather than inform.
Investors and customers care about impact, not intricate details. Focus on a one-liner and three core selling points—make them clear and compelling. If you can’t distill your ideas into simple terms, it’s not their misunderstanding—it’s your lack of clarity. Closing that gap isn’t optional; it’s essential.
4. Repetition Builds Mastery
Every pitch is an opportunity to refine your story. Think of VCs as a captive audience, required to ask tough questions and care about your startup—even if only for 30 minutes. With practice, you’ll learn what resonates and what doesn’t, enabling you to adapt quickly. This skill doesn’t just improve your fundraising—it strengthens your communication, leadership, and sales abilities.
The "Waste of Time" Mindset May Be a Red Flag
Viewing fundraising as a distraction often masks discomfort with scrutiny. If you can’t handle tough questions now, how will you address your toughest critics—your customers?
The best founders know when to pause fundraising and focus on building or pivoting. Continuing to pitch an underperforming product is as counterproductive as pushing it onto reluctant customers.
Final Thoughts
Fundraising is more than securing capital; it’s a strategic exercise in sharpening your value proposition. The tough questions VCs ask aren’t obstacles—they’re opportunities to refine your messaging and strategy. Use those insights to build clarity and trust with your customers, and you’ll create a business that resonates and scales.
If I had a dollar for every deep-tech founder who said, "You don’t get it because you’re not technical," I’d have a penthouse next to Elon Musk on Mars.
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Lane Litz is a proven startup founder, operator, and venture capitalist with a track record of building, scaling, and investing in high-potential startups. As employee #6 at VIPKID, she helped grow the company to a $3B valuation. Later, as the CEO and Co-founder of Speakia, she navigated challenging market conditions to lead the startup to acquisition. Her time in venture capital gave her a front-row seat to the systemic flaws in traditional VC, inspiring her to found Founder VC. Now, Lane is reshaping the venture landscape with a founder-first approach, focusing on sustainable investments that deliver measurable value for both founders and investors.