Fundraising Readiness · 11 November 2026
The Rush to Raise: Two Founders, Two Fundraises, 36 Months Later
The money you raise first decides the company you get to build. Most first-time founders only learn this 36 months later.
Every week, a founder tells me the same thing: “We need to raise. Fast.” Revenue is growing, a competitor just announced a round, and the bank balance feels thin. So the pitch deck gets rushed out, three or four fundraising agencies get signed on, and the deck lands in a few hundred inboxes by Friday.
I understand the urgency. But in my experience, two habits quietly damage more first-time raises than a weak market ever does:
- Raising without preparation. A deck is not a plan. Numbers that don’t hold up in diligence, a story that changes with each call, and no clear answer to “what will this money do?”
- Raising through many agencies at once. The same deck reaches the same investor from three different people. To an investor, that reads as desperation, not demand. Your round gets “shopped” before it ever gets taken seriously.
Underneath both sits a bigger miss. Founders ask “Who will give me money?” when the real question is:
“Who should own a piece of my company for the next 7 to 10 years?”
To show why this matters, let’s follow two founders. Same category. Same starting line. Different fundraising choices. Then let’s fast-forward 36 months.
Meet Rohan and Meera
Rohan and Meera are composites, built from patterns I see again and again. Any resemblance to your WhatsApp group of founder friends is entirely intentional.
Both run clean-label packaged food brands. Both have about ₹3 Cr in annual revenue, 40% of it from their own website and quick-commerce. Both want ₹8 to 10 Cr to expand distribution and build a second product line.
| Day 1 | Rohan“The Sprinter” | Meera“The Strategist” |
|---|---|---|
| Brand | Millet snacks | Cold-pressed oils and staples |
| Revenue at start | ₹3 Cr a year | ₹3 Cr a year |
| First move | Signs 3 fundraising agencies in week one | Spends 10 weeks preparing before speaking to anyone |
| The question they ask | “Who will write the biggest cheque, fastest?” | “Who can help us win the next 3 years?” |
| Investor list | 400 names, sprayed widely | 35 names, mapped and prioritised |
The gap between them on Day 1 looks small. One founder is just a bit more impatient. Watch what that gap becomes.
Months 0–6The raise
Rohan
Rohan sprints
Rohan’s deck goes out within ten days. Three agencies pitch him to overlapping lists. One fund partner gets the same deck from two agencies on the same morning and quietly marks it “being shopped.”
The calls start well, then wobble. His gross margin is 42% on one call and 36% on the next, because nobody reconciled the marketplace returns. His use-of-funds slide says “marketing and expansion.” When an investor asks which cities and what payback period, he doesn’t have an answer.
By month four, cash is getting tight and fatigue sets in. He takes the first term sheet on the table: ₹7 Cr from a fund that mostly backs SaaS. The valuation looks great. Buried in the terms are a 2x liquidation preference, a full-ratchet anti-dilution clause, and monthly revenue targets tied to board control. Agency fees and success commissions eat another 4 to 5% of the round.
He celebrates on LinkedIn. 600 likes.
Meera
Meera prepares
Meera spends ten weeks before her first investor call. Her team cleans the books, builds a unit-economics sheet that survives questioning, and opens a data room. She writes one clear use-of-funds plan: two states, modern trade entry, a second SKU line, and the hires each needs.
Then she does investor mapping. She shortlists 35 funds and angels who have backed food and consumer brands, understand long distribution cycles, and have operating partners in retail. She takes warm introductions through one trusted advisor, not five agencies. She also asks for references from founders those investors backed in bad years, not just good ones.
Her raise takes five months. She turns down a higher valuation from a fund that wanted a three-year exit. She closes ₹8 Cr from a consumer-focused fund plus two angels: a former FMCG sales head and a modern-trade category buyer. The terms are clean: 1x non-participating preference and standard protective rights.
She posts nothing. She is busy onboarding her new board.
Months 6–18The money starts talking
Rohan
Speed without direction
His investor expects software-style growth: 3x in a year. Food distribution doesn’t work like that. Distributors take 60 to 90 days to pay, shelf space costs money upfront, and repeat purchase takes time to build.
To hit the monthly targets, Rohan pours money into performance marketing and discount-heavy quick-commerce listings. Revenue jumps. Margins collapse. Board meetings turn into monthly interrogations about one number. Nobody on that board has ever negotiated with a modern-trade buyer, so when he needs help, there is none.
By month 14 he has burnt 70% of the round. He launches three new SKUs to “show momentum.” Two of them fail. His best operations hire leaves.
70% of the round burnt by month 14
Meera
Patient capital, sharp help
Meera’s investors agreed to a 36-month plan before they wired the money, so nobody panics when month 9 is flat. Her FMCG angel personally opens two regional distributor relationships. Her modern-trade angel helps her fix shelf planning and pricing before entering stores, not after.
Growth is slower on paper, about 1.8x in the first year. But each new channel is profitable at the gross-margin level before she scales it. Her monthly investor update is honest, short and consistent. She asks for help on one specific problem each month, and usually gets it.
By month 18 she has used 45% of the round, and her contribution margin is positive in both new states.
45% of the round used by month 18
Months 18–36Where they land
Rohan
The down round
At month 20, Rohan needs money again. Existing investors won’t lead, and new funds ask the obvious question: “Why isn’t your current investor putting in more?” The bridge round he finally raises comes at a lower valuation. The full-ratchet clause kicks in, and his stake drops from 62% to 31%.
By month 30, the board brings in a “professional CEO.” By month 36, Rohan is a minority shareholder in the company he started, and the brand is being sold in a distressed deal. The product was good. The customers liked it. The capital was wrong.
Meera
The Series A from strength
At month 28, Meera starts her Series A with 14 months of runway left, so she isn’t desperate. Her existing investor leads it and brings in a larger fund from their network. Revenue is ₹17 Cr, she is EBITDA-positive in her two oldest states, and she still owns 54%.
At month 36, she is in four states and two modern-trade chains, and she is choosing which investors to let in, not begging them.
The 36-month scorecard
| At month 36 | Rohan | Meera |
|---|---|---|
| Annual revenue | ₹9 Cr, shrinking | ₹17 Cr, growing |
| Founder stake | 31%, after the ratchet | 54%, after Series A |
| Next round | Down round and distressed sale | Series A led by her existing investor |
| Board | Lost control; replaced as CEO | Supportive, with retail operators |
| Cost of raising | 4 to 5% in agency fees, and 4 months of distraction | One advisor fee and 10 weeks of preparation |
| Founder health | Burnt out | Tired, but in charge |
Same starting line. Same category. Very different companies. The difference was not intelligence or effort. It was what they raised for, from whom, and how prepared they were when they did.
7 things that go wrong when you rush the raise
| If you do this… | …this is what usually happens |
|---|---|
| Send your deck through several agencies at once | Investors see the same deal from many sources and assume nobody else wants it. Your round is “shopped” and goes cold. |
| Pitch before your numbers are reconciled | The deal breaks in diligence, or the investor uses the gaps to cut your valuation. |
| Chase the highest valuation | You set a bar the next round can’t clear. A down round later costs far more than a modest valuation now. |
| Skip reading the term sheet closely | Liquidation preferences, ratchets and control rights decide who really owns the company when things get hard. |
| Take money from investors who don’t know your sector | They push the wrong growth model, like SaaS-speed targets for a food brand with 90-day receivables. |
| Raise without a clear use of funds | Money gets spread thin across experiments, and nothing scales properly. |
| Ignore the exit timeline | A fund that must exit in 3 years will push you to sell, flip or burn, even when the business needs 6. |
None of these feel dangerous on the day you sign. All of them show up by month 18.
The Meera method: how to raise the right way
Step 1
Decide what kind of investor you need
Before you ask who, ask what for. The right investor depends on your stage, your sector and the next three years of your plan.
| Investor type | Best for | Watch out for |
|---|---|---|
| Angels with operating experience | Early brands that need doors opened and practical advice | Small cheques; too many angels can make a messy cap table |
| Sector-focused VC funds | Brands ready to scale with a proven model | Fund life and exit timelines that may not match your business |
| Family offices | Patient capital for slower, steady businesses | Less structured support; sometimes informal decisions |
| Impact and blended-finance investors | Brands with real social or environmental outcomes | Reporting needs; make sure impact metrics are ones you can track |
| Strategic investors (corporates) | Distribution, sourcing or category access | Can limit future buyers or partners |
| Non-dilutive capital (grants, schemes, debt) | Building assets, pilots and working capital without giving away equity | Takes time; needs compliance and good documentation |
Step 2
Ask the 5 investor-fit questions
- Have they backed companies like ours, and stayed with them through a bad year?
- What will they do besides wire money: introductions, hiring, distribution, follow-on rounds?
- What is their fund timeline, and does it match how long we need to grow?
- What do their founders say, especially the ones whose companies struggled?
- Do they have the money and the intent to invest again in our next round?
Step 3
Get ready before the first call
- Clean, reconciled financials for the last 24 to 36 months
- Unit economics per channel: gross margin, CAC, repeat rate, payback period
- One specific use-of-funds plan, with milestones the money will buy
- A data room: company documents, compliance, key contracts, cap table
- A 36-month plan, and a clear idea of what the next round needs to see
- A mapped, prioritised investor list of 30 to 50 names, not 400
- Warm introductions through one trusted channel, not several agencies
- At least 9 to 12 months of runway when you start, so you can say no
The bottom line
Fundraising is not a race to the first cheque. It is choosing a partner who will sit beside you through the hardest years of your company.
Rohan was not a bad founder. He was a rushed one. Meera was not luckier. She was better prepared, and she knew what kind of money she needed before she went looking for it.
If you are raising for the first time, slow down by ten weeks so you don’t lose the next three years.
Planning your first raise?
At Colab Alpha, I help founders get investor-ready: sharpening the fundraising story, building numbers that survive diligence, and mapping the investors who actually fit your journey, including non-dilutive options many founders miss.
Book a Discovery Call →Rohan and Meera are illustrative composites based on common patterns in early-stage fundraising. Figures are examples, not data from any real company.
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