4 Surprising Lessons I Learned While Raising Startup Capital
- Gregory Henson
- Mar 16
- 2 min read
Updated: Nov 5
Raising capital is often seen as the ultimate milestone for a startup. Founders chase investor meetings, perfect their pitch decks, and dream of landing that big check. But after going through the process, I realized that fundraising isn’t always what it seems. Here are four surprising truths I learned while raising money—things I wish I had known earlier.
1. Fundraising is 90% Relationship Building, 10% Transactional
Investors don’t invest in decks—they invest in people.
I used to think that if I had the perfect pitch and solid numbers, investors would be lining up. But in reality, the best time to raise money is when you don’t need it.
🔹 Stay in touch with investors before you need to ask for money. 🔹 Build relationships early—some of my biggest investors came from relationships I built years before they wrote a check.
💡 Lesson learned: Play the long game. Fundraising is more about trust than financials.
2. A Signed Term Sheet Doesn’t Guarantee Funding
I had investors pull out last minute—even after signing term sheets.
It’s a painful lesson, but nothing is real until the money is wired. Deals can fall apart for countless reasons:
🔹 Investors get cold feet. 🔹 Market conditions change. 🔹 A better deal comes along.
Fundraising is unpredictable, so always keep the momentum going until the money is in the bank.
💡 Lesson learned: Term sheets mean nothing until the funds are transferred. Always have backup options.
3. Venture Capital Isn’t a Golden Ticket
Raising millions sounds like a game-changer, but most VCs don’t offer more than a check.
🔹 No game-changing introductions. 🔹 No hands-on support. 🔹 Just passive capital.
I learned that bootstrapped founders often build stronger businesses because they maintain full control. Before raising, ask yourself: Do I really need VC funding, or are there better ways to grow?
💡 Lesson learned: More money doesn’t guarantee success—strategic growth does.
4. The More You Raise, The Less Power You Have
Every dollar raised costs control—VCs don’t just invest, they influence.
🔹 Once you take money, you have a boss—board meetings turn into performance reviews. 🔹 The more capital you raise, the more diluted your ownership becomes. 🔹 If you’re not aligned with investor expectations, you could be replaced.
💡 Lesson learned: Money comes with strings attached. If you don’t want to be on someone else’s timeline, be mindful of how much you raise.
Final Thoughts: Fundraising Isn’t What You Think
🚀 Trust beats numbers—fundraising is all about relationships. 🚀 A signed term sheet means nothing until the money is in your account. 🚀 Venture capital won’t magically grow your business—you still have to execute. 🚀 The more you raise, the more control you lose.
Raising capital isn’t good or bad—it’s just a tool. However, understanding the realities of fundraising before you start will help you make better decisions for your startup’s future.
