Why 90% of Founders Are Fundraising Too Early (And How to Know If You're One of Them)

Last week's piece on ‘Why Desperate Founders Never Get Funded’ struck a nerve. The inbox overflowed with feedback. Some read like confessions: founders pivoting mid-campaign, drastically cutting their ask, desperately searching for "any investor who would listen."
 
Let's be clear: we're in one of the most challenging funding markets in years. Capital is scarce, investors are highly selective, and the easy money of 2021 is a distant memory. So, this desperation is partly understandable – survival instincts kick in when runways shorten.
 
But it's also a function of founders not fully grasping where the bar now sits. What might have raised a Seed round three years ago won't even get a meeting today.
 
Here's the uncomfortable truth that emerged from the feedback: The problem isn't that investors aren't listening. It's that founders are speaking before they know what to say.
 
Let’s examine this and share some deeper insights from recent founder calls.
 
 
The Desperation Spiral
 
"We're now operating with desperately short runway," wrote one founder. Another admitted they'd "significantly adjusted or pivoted their funding strategy mid-campaign." A third confessed to abandoning their search for investment and were now “trying to offload the entire company."
 
The data backs these sentiments. The consensus amongst investors shows only 5%-10% of pitch decks sent to any given investor turn into meetings. The rest fade into rejection. Even for those who do get meetings, it typically takes 20-30 investor pitches to secure a single term sheet, according to Founders Forum. The upshot? Only 5-10% of startups seeking funding are successfully closing any round at all right now.
 
More tellingly, the difference between first-time founders and serial entrepreneurs isn't just experience – it's understanding what it takes to make a business ready for institutional investment. According to Pitchbook, serial entrepreneurs take 1.3 years to raise their first institutional round, while first-time founders take 2.2 years. This raises the stakes even further for the vast majority of entrepreneurs.
 
What separates those who succeed from the 90%+ who don't? What enables serial entrepreneurs to move with so much more intent? Preparation. They are pitching a compelling investment proposition to well qualified investors with great confidence (3 of the 4 pillars from last week). This confidence is boosted from knowing the timing is right. How so?
 
 
The Fundamental Mismatch
 
Serial founders understand something first-timers often miss: You raise capital when you've hit an exciting milestone, not because you're running out of money. That milestone demonstrates you're on a journey to somewhere big – it's evidence of momentum, not just survival.
 
But founders will rarely admit they were off on timing: Instead, most of the founders reacting to last week’s piece rated themselves weakest on 'communications'. But dig deeper, and it becomes clear that poor communication is often the symptom, not the cause. As one founder discovered, "no amount of great comms can mask a market size that isn't big enough to excite” or “a runway that doesn't give investors enough time to undertake proper due diligence just hammers the confidence”.
 
The result? Founders are trying to communicate a story that doesn't yet exist. They're pitching potential rather than progress, hope rather than evidence. And even when the story does have legs, it's too much of a race against time.
 
 
The Mind of the Buyer
 
Why is this all so hard? Contrary to popular belief, there's no universal "what investors want" checklist. A Seed-stage angel, a Series A venture fund, and a growth equity PE investor are buying fundamentally different things. An impact investor's criteria differ vastly from a DeepTech specialist. A UK regional fund has a different mandate than a Silicon Valley mega-fund.
 
The strategic insight isn't about what all investors want – it's about understanding that every investor has a specific thesis, mandate, and return profile they're trying to fulfil.
 
Your job isn't to reshape your business to fit a generic investor mould. It's to deeply understand which investors' specific needs align with what you're building.
 
As we highlighted above, investors now take an average of 2.2 years to fund first-time founders, versus 1.3 years for serial entrepreneurs. The difference? Serial founders don't try to be everything to everyone. They know their story, they know which investors that story resonates with, and they know how to find the overlap between what they're building and what specific investors are seeking. They put themselves in the mind of the buyer.
 
This is why the feedback about founders abandoning their search for "aligned investors" in favour of "anyone who would listen" is so troubling. It's not just desperate – it completely undermines any leverage a startup may have. The founders who succeed aren't the ones who eventually find an investor willing to write a cheque. They're the ones who understand which investors were always going to be interested in their specific opportunity.
 
 
The Polarisation Paradox
 
This is where the feedback on ‘polarisation’ was particularly revealing. Serial founders embraced it, understanding that polarisation "saves precious time by filtering out non-aligned investors." First-timers felt more anxious, preferring to "cast the widest net."
 
Here's the paradox: The wider you cast your net, the less likely you are to catch anything.
 
Why? Because generic pitches attract generic rejections. When you try to appeal to everyone, you resonate with no one. Investors are pattern-matching machines – they need to quickly understand which box you fit into, which successful companies you resemble, which thesis you validate.
 
 
The AI Mirage
 
And another revealing piece of feedback from last week: the confirmation that many founders are relying on AI platforms to research investors. "Just ask ChatGPT for a list of relevant VCs" has become the default playbook for some. But it’s dangerously naive.
 
The fundamental flaw isn't with AI per se – it's with how founders are using it. General-purpose LLMs are trained on public data, but the information that really matters lives behind paywalls. Which partner just led a competing deal? What's a fund's actual dry powder? Are they still in their investing period? Who's actively deploying versus just taking meetings? ChatGPT doesn't know because this data isn't publicly available.
 
And questions such as "Which investor at each of my target funds will align most strongly?" requires precision in understanding portfolio structure and individual investor biographies. Without trusted data, that's not a prompt; that's a research project. Because when LLMs don't know something, they make plausible-sounding answers. In fundraising, plausible isn't good enough. Founders are spending too much time fact checking and not enough time engaging.
 
Make no mistake, AI can be a game changer. For professional advisors that are integrating leading investment databases with tailored AI tools, the effect can be transformative for campaign efficiency. But for founders rolling their own, using (almost) free tools with public data and hoping for proprietary insights, this has become a time sink and not a time saver.
 
 
Your Reality Check
 
Where does this all leave us? The clearest signals from last week's feedback were:

Identifying investors that have strong alignment with your mission is the critical starting point. This forces you to be clear on the mission (what kind of business am I building?), and highly diligent on investor selection. Your job isn't to reshape your business to fit a generic investor mould. It's to deeply understand which investors' specific needs align with what you're building.
 
Many founders are starting their fundraising journey too near the finish line. They're pitching before they're prepared, seeking capital before they've created value, desperate before they've demonstrated capability. Are you raising because you've built something fundable, or because you're running out of time?
 
If you’re truly confident that you’ve identified the right target investors and have built a compelling investment proposition, are you ready and able to communicate it with real confidence? Are you trying to be all things to all people or are you ready to polarize opinion?
 
If you’re uncertain about any of these topics, stop fundraising and find a sounding board to stress test your assumptions. It’s clear from the founders we spoke to as a result of last week’s briefing note, too many are putting themselves under immense and unnecessary pressure to come up with all the answers without any real help. Don’t try and muddle through on your own.
 
That's not just good fundraising advice. It could be the difference between joining the 90% who fail, and the 10% who build something enduring.

If you're raising in the next 6-12 months and want to assess your approach before the pressure hits, let's talk.