The Truth About Fundraising In The Summer (Plus 5 Strategies!)
It’s common lore in the venture world that summertime is slow and quiet.
Founders are told:
Don’t raise in the summer. And definitely don’t raise during the last 2 weeks of December.
In fact, I say that almost verbatim right here.
Whaaaaa?
But, Kathryn, what about our dangerously low runway and the hires I need to make for growth?? WTF?????
Are you screwed or is the summer lull an exaggeration? What’s the truth about fundraising during the summer? What can you do to raise faster regardless of the calendar?
Let’s dive in! (…to the pool on a hot’s summer day? No way! Back to work!)
Truth: Deals Get Done
Deals are always getting done. Year-round.
Salesloft closed their transaction with Vista Equity on Dec 23.
At Atlanta Ventures, we have deployed millions of dollars over summer months and talk to startups all summer long.
We have portfolio companies fundraising now and are in discussion with startups raising money.
Investors are hustlers and high achievers, many coming from startup backgrounds themselves. They don’t want to take breaks or miss an opportunity.
Contrary to the jokes, the investors I know are hard working and care deeply about helping founders.
Also: VCs Have Families
Brace yourself. Surprise coming.
Investors are human!
With families even.
We’re not artificially cloned from a spreadsheet and a Patagonia Vest (…YET. Let’s see what AI can do!)
Our families may include school-aged children, aging parents, or even a (very patient and heroic) spouse.
The combination of official holidays, educational institution breaks, and the snowball of if-other-people-are-out-it’s-a-good-time-for-me-to-be-out-too make summer and late December prime time to spend with loved ones.
A truth known across the business world — which is why the biggest conferences are usually in the spring or fall (e.g. Venture Atlanta, SXSW, Dreamforce).
It’s also why Q3 is typically a slower sales quarter.
So while it’s not the European style of 6 weeks vacation (#jeally), if one partner is out for a week, then another key player is out the next week, then you have a holiday weekend, and there’s fewer events to meet at…small things add up.
It can be hard to get momentum going and feel like things are dragging.
So what the heck is a founder to do????
5 Strategies For Summer Fundraising
1. Give yourself buffer.
A “quick” raise often takes 100 meetings and 6-9 months. Make sure you have time and cash runway. It’s better to plan for summer to be slower and things move unexpectedly fast than the opposite.
2. Develop relationships early and often.
Connect with investors before you need to raise. Send regular updates so they get to know your business and see progress. The better they know you, the quicker they can move and the more they will prioritize you. Be a line not a dot.
Summer is a great time to develop relationships if you haven’t already.
Bonus: study up on investors — what they look for, insider tips, and fave blogs and podcasts.
3. Focus on customers.
You know what makes a fundraise go faster? Having amazing customer traction and growth. Yes, customers take summer vacations, but someone is always in office and ready to learn, optimize, share feedback, or get more value (and upgrade???? 🤞🤞🤞). Help them do this!
Here’s 5 tips on how to have a great customer call.
4. Do the leg work.
Figure out who your ideal investors are. Refine your elevator pitch and pitch deck. Understand what investors care about and how to grab their attention. Learn how to talk about revenue (regardless of how much you have) and make a realistic TAM slide. Prep and do meetings with friendlies so you’re ready to roll once September hits!
5. Build an incredible business.
Last but definitely not least…there’s no “short cut” better than an awesome business. Be great and light a (summer bon)fire under every investor you meet. Make it easy to say yes. This is definitely the HARDEST thing to do but results in the quickest raise.
I will tell you all the insider tips but at the end of day, nothing beats an awesome business. Annoying, I know!
What other tips do you have for fundraising during slower times of year? Have you successfully raised during the summer? What worked for you?