We hosted a discussion covering the current state of the market, fundraising best (and worst) practices, and practical tips for founders -followed by breakout sessions connecting founders, VCs, and ecosystem partners. What emerged was a picture of today’s shifting fundraising landscape, the higher fundraising bar that founders are now held to, and a tactical discussion of how to stand out in this challenging fundraising environment. Here are some of my biggest takeaways:
The New Fundraising Environment
Perhaps the most striking consensus among our panelists was how dramatically the fundraising environment has shifted. What we’re seeing is not simply a correction from the highs of 2020–2021, it’s a recalibration of expectations at every stage. At the same time, for quality assets in high-demand industries, fundraising timelines, valuations, and round competitiveness are more reminiscent of, or even surpassing, ZIRP-era dynamics. A few examples:
- For most, fundraising timelines have stretched: According to Carta, The median time between Seed and Series A rounds is now over 2 years (vs. 1.5 years in 2021). Startups need to take this into account when considering runway planning, but likely also need to start fundraising earlier in tandem. How early? Vignesh tells his portfolio companies to think about their next raise 15 months in advance. That doesn’t mean actively fundraising for over a year, but preparation and process design well in advance of the pitch phase can yield success down the road. With that said, the panelists also agreed that high-demand deals seem to be moving faster every day.
- Round sizes and valuations are increasing, but fewer deals are getting done. Round sizes and valuations at the early stages are up, with investors willing to pay a premium for the best deals, especially if they are AI-native software businesses. While companies that do successfully raise are doing so at higher valuations than even the peaks of 2020–2021, investors have become more selective, and fewer companies are making it through the funnel at all.
- The bar for traction keeps rising. While we don’t really talk about entry multiples at the Seed stage (revenue multiples change daily in an early-stage startup), if we did, it would be safe to say they have declined. The data is particularly clear for Series A businesses, with ARR of such companies having doubled since 2021 while valuations have increase by only ~10%. In the world of AI, where vibe-coding allows founders to spin up MVPs in days or weeks rather than months, raising on vision alone is no longer as commonplace. Ideas need real validation before they’re ready for institutional capital.
So… all we’re really asking founders to do is raise more and/or burn less while growing ARR faster so that they can successfully raise again in a more competitive and tighter capital market…
Let’s Get Tactical
While there’s still no single right way to raise capital, here are some of my favorite tactical suggestions for founders from our conversation.
- Preview and plan before executing. I am not a proponent of constant fundraising. Businesses require time and attention to be built. However, if organic opportunities emerge to interact with investors that might be a fit for the next round, take them. When you eventually raise, you’ll be coming to them from a position of better leverage. Keep track of these investors and other potential fits in a CRM (even if it’s just a spreadsheet). Ask your existing investors to add relevant VCs to your list and denote where they can provide warm intros. Coordinate this outreach ahead of time.
- Batch investor interactions. There are many tactics we could borrow from banked M&A engagements that would vastly improve and optimize early-stage fundraising processes… but that’s for another article. One concept in particular that Vignesh emphasized was the idea of batching investor engagement. As difficult as it may be, try to hold all initial pitches over the course of about two weeks. Getting investors aligned on the same timeline will allow you to more authentically create scarcity and optionality down the road.
- Proactively address perceived objections. Haley emphasized what you’d expect from an investor at Hustle Fund: hustle matters. She suggested that one way to illustrate hustle, as well as perceptiveness and self-awareness, is to proactively address perceived investor objections. Did you notice that the VC on the other side of the screen got quieter or shifted body language after a certain part of the pitch? Follow up after the meeting with more information on that topic.
- Set next steps. Investors are trained to keep their options open. There is no immediate economic incentive for an investor to tell you they are a pass before they need to. That’s why most investors are going to end the first meeting with something like “This was awesome and we appreciate your time. We’ll sync on the opportunity and get back to you with next steps.” As Vignesh said, “don’t get happy ears!” Do your best to set concrete next steps before you leave the meeting.
- Own your story. Mei shared a powerful story of a meeting she took in which the founder had another member of their team deliver the majority of the pitch. While it’s important to show the strength of the overall team, especially at Series B and beyond where Mei invests, this behavior is a red flag. While this was an extreme example (the likes of which I have never personally witnessed), it illustrates an important point: investors want to understand the “why” behind the business — your origin story. This is best delivered in your own words and voice. Own it and tell it proudly. Your passion for the problem you’re solving will shine through and be a compelling element of the pitch for the audience.
Looking Ahead
For founders navigating the fundraising market in 2025, three things should stay top of mind: start your preparation earlier, build in longer timelines, and don’t be surprised by the road bumps. Even with a full toolkit, fundraising is hard. Hang in there.
Also, we love to help! At Bridge, we believe that founders already have an extremely difficult job — now they have to be their own investment bankers too? After we invest, we leverage our backgrounds in M&A advisory and later stage investing to help our portfolio companies prepare to raise subsequent rounds of capital. If you’re building in an overlooked category underserved by innovation and would value the addition of our fundraising expertise to your cap table, reach out. We’d love to hear from you!
Did you attend the Capital Summit? We’d love to hear your thoughts and feedback. Drop us a comment or send us an email. If you’re building in B2B SaaS, Consumer, or Marketplaces, let us know here.