Raising Capital? Here’s What Founders Who’ve Actually Done It Want You to Know

Every founder eventually asks the same question: How do I raise money?

There isn’t a single formula.

Some companies bootstrap for years before taking outside investment. Others raise capital before launching a product. Some investors move quickly, while others spend months getting to know a founder before writing a check.

But after speaking with entrepreneurs and investors across Virginia, one thing becomes clear: successful fundraising rarely starts when you’re asking for money. It starts much earlier—with relationships, momentum and trust.

Jennifer O’Daniel, Senior Investment Director at Virginia Venture Partners, encourages founders to think about fundraising as an ongoing conversation rather than a one-time pitch. Instead of waiting until it’s time to raise capital, she recommends consistently sharing what you’re building, what milestones you’ve reached and where you’re headed next. Those updates allow investors to watch a company execute over time instead of trying to evaluate everything in a single meeting.

That visibility shouldn’t stop with investor updates.

As O’Daniel puts it, “I would be pitching to everybody. You’re at Starbucks? Talk to the person in front of you, behind you, tell them what you do. Get really comfortable talking about what it is you do.”

The point isn’t to turn every conversation into a sales pitch. It’s to become comfortable telling your story. Every interaction is an opportunity to refine your message, grow your network and potentially meet someone who can help move your business forward.

PlayYourCourt founder Scott Baxter learned a different lesson after raising his first round of capital.

Looking back, he says his mistake wasn’t raising money—it was raising too much too early.

“Don’t raise more money than you need to prove that it’s worth that next round.”

Early in the company’s journey, Baxter raised roughly $250,000 and gave up nearly 40 percent of the business. In hindsight, he believes a better strategy would have been to raise only enough capital to reach the next meaningful milestone. By increasing the company’s value before returning to investors, founders can often raise more money later while giving up significantly less ownership.

As Baxter explained on The Fervent Four, founders should “raise whatever the minimum amount is that you need to convince whoever you raise that money from that it’s worth more than they think it’s worth right now, so you can raise more and not give up more and more of your company.”

It’s a lesson that’s easy to overlook. More money isn’t always better. The objective is to create enough progress between fundraising rounds that investors assign a higher valuation to the business, allowing founders to preserve more equity over time.

That philosophy also requires founders to know exactly what every dollar will accomplish.

Baxter had a very specific plan for his first investment.

“Quarter million dollars… was enough for me and my business partner to quit what we were doing and focus on this full time for a year with a small ad budget to get it up off the ground.”

Investors aren’t simply investing in an idea. They’re investing in execution. Founders who can clearly explain how capital will accelerate customer growth, product development, hiring or manufacturing inspire far more confidence than those who simply say they need money to grow.

Baxter also discovered another lesson many founders eventually face—not every investment is the right investment.

One early offer would have required him to give up majority ownership of his company.

His response was straightforward.

“If I wanted to come work for you, I would have just applied for a job.”

The right investor should bring more than capital. The best investors become advisors, connectors and long-term partners who believe in both the founder and the vision they’re building.

Once founders understand what type of investor they’re looking for, Crunchy Hydration founder Megan Riggs believes technology can dramatically improve the search.

Instead of blindly reaching out to hundreds of investors, she recommends using AI to identify people who are already investing in similar companies, understand their backgrounds and uncover mutual connections before making an introduction.

“Use AI! ChatGPT or Claude. Ask them for the type of investor you are looking for and then ask for all information they can find on them and then connect on LinkedIn and see if you have any mutual connections and ask for an intro.”

Riggs says founders shouldn’t stop there.

“And use your community! Ask those around you if they know anyone who would be a good fit for the opportunity to get involved in your biz.”

Warm introductions continue to outperform cold outreach. Whether the connection comes from another founder, an advisor, a customer or an investor already in your network, trusted relationships often open doors that a pitch deck alone cannot.

Taken together, the advice from these founders and investors points to a common theme. Raising capital isn’t about delivering the perfect presentation or memorizing the perfect pitch. It’s about consistently executing, communicating your progress and building relationships long before you need to ask for money.

The strongest founders don’t simply convince investors to believe in an idea.

They give investors a reason to believe in the people building it.