Like a lot of industries, investment runs in cycles and for the most part, has clearly defined seasons of peak activity. Whilst it’s not impossible to raise investment outside these peak seasons, if you can plan your investment rounds to align with these cycles, you’ll likely have a lot more success.
As a general rule of thumb, we tend to advise that you plan your peak fundraising activity such as investor outreach, investor meetings or a public-facing crowdfunding campaign during school term time in the UK. This avoids the inevitable mass out of office responses you experience during the Christmas break and August school summer holidays.
When it comes to raising investment, you’ll not be surprised to learn that planning is everything. When the Raising Partners team sit down to set out a project plan for a fundraise with a client, we split the project into three phases:
Getting Investor Ready>
Investor Outreach & Pitching>
This involves the production of all investment assets including the investor deck, financial model and any crowdfunding assets, as well as setting the investment strategy including valuation and a target list of investors. On average, this takes 4-6 weeks.
Once the assets are ready and you’re ready to “go-to-market”, the investor outreach can begin. The time this part of a fundraising project takes is very dependent on a couple of factors:
It’s important to note that few scenarios are “easier” or “quicker” than the other. For example, if you’re raising £250,000 but don’t have any warm investor leads, it can take just as long, or even longer, than a serial founder raising £1,000,000 from people they already know.
Allow at least 8-12 weeks, if not longer, for investor outreach, pitching and getting commitments in.
It’s very easy to forget about the completions phase of your fundraise, but arguably it’s the most important. Nothing is set in stone until the investment lands in your bank account and all the legal documents have been signed. Once an investor, or group of investors have decided to come on board, it typically takes between 4-6 weeks for any final due diligence checks to take place, legal paperwork to be agreed and funds to be transferred. The due diligence and completions phase of a crowdfund or institutional raise can be even longer than this.
Angel rounds can often be much quicker with completions happening within 1-2 weeks depending on how many people are coming on board.
It may seem obvious to state, but whenever possible you should allow yourself plenty of time to execute a funding round. Keeping a close eye on your cash position and having a detailed financial model will help with this. At Raising Partners, we always allow a minimum of four months from the start of a project to the day the cash lands in the bank.
With this in mind, below are some example timelines you may choose to follow:
Finally, it’s worth noting the key times of year that can have a significant impact on your timeline:
The financial year end. The 1st of March to 7th of April is an incredibly busy time for investors, with many looking to close specific deals in advance of the year end, particularly those with SEIS or EIS tax relief associated with them. This can impact your round either positively or negatively. Either you’ll be one of the lucky ones who get pulled along into a quick turn-around process as investors seek to close your deal ahead of the year end. Or, you’ll receive a polite note that they will be able to get back to you in the new financial year whilst they work on closing other deals. The key take-away here is to aim to be the former, but plan for the latter.
Easter and half-term holidays also impact timelines so factor these in as “down” weeks when you’re unlikely to have lots of investor meetings confirmed and use this time to either prepare your investment assets or work on your strategy and identifying new leads.
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