Fundraising is broken. I spent years watching it happen, now I'm fixing it, and VCs are going to hate me for it.
Since closing my VC-backed business in 2018, I have supported founders on 150+ successful fundraising rounds. In 2020, I personally wrote and managed 13% of all funded campaigns in Europe, and I spend every waking hour of my life working alongside pre-seed and seed stage companies raising funding.
The fundraising gap is getting larger, and it's a big problem.
Twelve reasons the system is failing founders
- Fundraising is expensive. VC firms will take 10-12% in fees. Plus legals, plus, plus, plus.
- It is painfully slow. Data suggests 30+ meetings per investor to get the cash to drop.
- Crowdfunding platforms have lost interest in smaller raises. They are not profitable, and the platforms require 70%+ of the cash raised upfront.
- Fundraising is a game that has no rules. No one actually knows the answer.
- VCs have too much power. Not only in your business, but in the entire global ecosystem. They can define culture.
- Female founders are let down at all stages of fundraising. 2.3% of global VC investment going into female-founded companies is shameful.
- Black and ethnic minority founders are not taken seriously. The bias is outrageous, and it is heartbreaking watching it in real time.
- Founders from a low-income background have practically zero access to financial markets.
- There is no merit-based system. It's down to (insert your tinfoil hat theory here).
- There is zero innovation in this industry, and it is harder than ever for early stage founders to raise capital.
- You can count on your fingers how many VCs are investing serious capital into this space.
- Friends and family are left to pick up the bill, contributing more than 50% to early stage funding rounds.
Same model, same empty bag
We rinse and repeat the same funding model time and time again and wonder why we are left holding an empty bag.
The start-up ecosystem powers the entire planet. I believe it is the best chance we have at fixing our most challenging issues.
Yet we treat these people like muck on our shoes.
What needs to change
We need to back entrepreneurs in a fair financial system that drives innovation. We need to start backing entrepreneurs who build sustainable business models. We need to start backing entrepreneurs so they can change the world.