Guides · Venture capital

How to Run a Venture Capital Fundraising Process

Most founders treat a fundraise like a mass email project. They send the deck to everyone and hope. The investors I talk to work very differently. They have a focus, a way of picking deals, and they want to know you before they write a check.

This guide walks through the process the way I see it from the investor side. I have interviewed venture investors and family offices on camera. What they tell me is consistent. Fit comes first, trust takes time, and the first check is rarely the last round.

Step by step

Step 1. Know who actually writes checks

Start by learning the types of investors in your space. In my videos I have spoken with a family office that runs a private equity and venture side with about 266 companies. I have also spoken with a venture and micro PE firm focused on sports, media, entertainment and consumer. These are very different buyers. One may take a minority stake early. Another may want control. Write down which type fits your stage and your deal before you build any list. Making that choice early can cut down on outreach to investors who are not a fit.

Step 2. Learn what investors screen for

Joseph, who runs a venture and micro PE firm, told me the first thing his team asks is whether they wholeheartedly believe in the thesis, the founder, the company and the product. The second is whether they can add tangible value. Build your story around those two questions. Say clearly why your founder is the right one. Say clearly what help you want from an investor besides money. Investors hear that everyone is value add, so be specific about what you need.

Step 3. Build a list matched to focus

Investors stay in lanes. One family office told me they now avoid some industries, because after reviewing their portfolio they saw where they pick well and where they pick poorly. They double down on what they know. Joseph's firm keeps a core focus on sports, media and entertainment for the same reason. So match your raise to each investor's actual focus. A short list of investors who fit beats a long list of investors who do not. Read what they have backed before you reach out.

Step 4. Build the relationship before the ask

One family office told me they found their venture partner through a banking contact. The introduction was luck. The partnership was not. It took over a year and well over 20 meetings to set up. Plan for trust to take time. In my experience, meeting in person is often more effective than a single Zoom call. Spend time, answer questions honestly, and let the investor get to know you. Do not rush a large check from a stranger.

Step 5. Show the value you bring

Early investors want to help. Joseph said that in earlier stage deals his team can take a material piece of the cap table and one or multiple board seats, and they get in the trenches with the company. If you want that kind of partner, tell them how you would use them. Name the introductions, the hiring help or the industry expertise you want. Be ready for questions about the board and your cap table, and have a clear answer for each.

Step 6. Run diligence in both directions

Expect the investor to test you, and test them back. The family office I spoke with said there is no four-step checklist for vetting a partner. They spend time, get to know each other, and trust their gut as part of it. You can do the same. Ask other founders about the investor. Ask how they behave when things go wrong. Keep your own records tidy so diligence moves quickly. Many founders talk with a securities attorney about how to handle their documents before sharing them.

Step 7. Plan for follow-on capital

Your first round is rarely your last. One venture firm I featured has invested in 300 companies, and most of them went on to raise follow-on capital from outside investors who became co-investors. That helped the early investment grow by five to eight times in their case. Tell your first investors how you plan to raise the next round. Show who might lead it. Early backers like to see a path to more capital and a clear use for each dollar.

From my talks

From the Family Office Club stage

One thing I tell families is not to invest in really high risk startups unless it goes through a professional venture capital or angel investor fund, or it sits in the industry where they made their money. Founders should hear that. A family office that writes you a direct check is often making an exception to its own advice. So show why you are the exception. Point to the industry where the family built its wealth, or bring a credible partner or fund alongside you. I have also seen raises move faster when a small project is paired with a group that has a billion dollar balance sheet.

Where people go wrong

• Sending the same deck to every investor without checking their focus.
• Asking for a large check before any relationship exists.
• Relying on one Zoom call to build trust for a significant investment.
• Giving vague answers on how an investor could add value beyond money.
• Ignoring follow-on capital and having no plan for the next round.

Facts and figures

• One family office I interviewed said its partnership with a venture partner took over a year and well over 20 meetings to set up.
• A venture firm that has invested in 300 companies said most of them raised follow-on capital from outside investors who became co-investors.
• One family office runs private equity and venture investing across about 266 companies, and says almost 95% of its activity is now in that area.

General education only. Not legal, tax or investment advice.

Talk to a securities attorney to explore options around offering documents, investor eligibility rules and board and cap table terms. Do not use AI to write your own legal agreements.

Questions about this guide

Related questions

• How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
• What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
• How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.
• How do I raise money with no track record?I would raise money without a track record by focusing on credibility, relationships, and evidence of my ability to execute.

Use the pitch deck grader alongside this guide.