Fundraising is a critical, yet often daunting, challenge for startups. While many founders approach it with conventional wisdom, Techstars Managing Directors Andres Barreto and Georgie Smithwick have identified "counterintuitive" strategies that significantly increase the chances of securing capital and reduce the time it takes.

In a workshop during our recent Inside a Techstars Accelerator event, Andres and Georgie shared four tips to demystify the investor process and set your startup up for success:

1. Expect (and Embrace) Rejection: Don't Give Up Too Early

The fundraising landscape is competitive. With over 20,000 startups created annually and only about 5,000 receiving funding, rejection is a statistical inevitability.

You might convert only 1-4% of your investor calls into actual checks. This means you should prepare for hundreds of rejections. Don't let rejection demoralize you. Instead, view each "no" as an opportunity to refine your pitch, understand objections, and ultimately get better.

Many successful startups endured 300+ rejections for their initial rounds before becoming oversubscribed. The more calls you have, the better you become, turning the process into a strategic game.

2. Fundraise as a Full-Time Job: Temporarily "Quit" Managing Your Startup

Fundraising is not a side project; it's an all-consuming endeavor. Many founders underestimate the time and focus required, attempting to juggle fundraising with day-to-day operations. This divided attention often leads to missed opportunities, slow follow-ups, and an inability to quickly adapt your pitch based on feedback.

To succeed, you must commit to fundraising as a 200% full-time job. Communicate this to your entire team, ensuring they can take on operational responsibilities and provide support.

Clear your schedule completely — no conferences unless they're explicitly for investor meetings, no coding, no other operational tasks. This intense, focused period is crucial for quick follow-ups, back-channeling, and continuous deck refinement. Companies that dedicate themselves fully to this phase are far more likely to succeed.

3. Overkill in Preparation: 80% of the Work Happens Before the First Meeting

Founders are often impatient, eager to get their MVP to market and iterate quickly. However, this "iterate as you go" mindset is detrimental to fundraising. Investors have limited time and data to evaluate your startup. They need to see that you are serious about your business and will treat their capital and time with utmost seriousness.

This seriousness is demonstrated through meticulous preparation. 80% of your fundraising work should be completed before your first investor meeting. This means having a polished, compelling deck, a comprehensive and thoughtfully presented data room (even for pre-seed rounds!), and a well-rehearsed story.

Don't wait for investors to ask for follow-up materials; have everything ready to send immediately.

A high-quality data room signals strong execution and operational capabilities, delighting investors and building confidence that you are the right team to back. Sloppy materials raise red flags and suggest a lack of commitment.

4. Engineer Scarcity and Momentum: Create FOMO for Investors

Investors, like anyone, are influenced by supply and demand. If you're not experiencing exponential growth that naturally creates buzz, you can engineer scarcity and momentum to generate "fear of missing out" (FOMO).

• Calendar Density: Don't take investor meetings as they come. Instead, coordinate all introductions (warm or cold) to send emails around the same time. Then, compress your meetings into a short, intense period (e.g., 10 meetings in half a week instead of two months). This tight process removes the "free option" for investors to delay their decision. When asked about commitment, you can state, "We just got started, but we have 40 meetings lined up this week." This subtly communicates competition.

• Strategic Round Sizing & Valuation Tiers: Go to market seeking less than your target raise to create an "oversubscribed" perception. For example, if you want to raise $1.75M, announce a $1M round.

  • Offer an initial, smaller tranche (e.g., $250K) at a lower valuation cap (e.g., $5M instead of $7M) for early, conviction-driven investors who don't need a lead. This incentivizes quick commitment.

  • Once this tranche is filled, update all your scheduled meetings, announcing the progress and the remaining availability (e.g., "only $500K left at the $7M cap").

  • When the initial target (e.g., $750K) is met, announce that the round is fully subscribed, but due to high demand (which you engineered!), you've decided to extend the round for an additional amount (e.g., $1M) at a higher valuation (e.g., $10M). This creates strong momentum and signals intense investor interest, even if the business fundamentals haven't drastically changed overnight. Investors may grumble about the increased valuation, but the FOMO and perceived momentum will often lead them to agree.

By adopting these counterintuitive tips, founders can navigate the challenging world of fundraising more effectively, increase their chances of securing capital, and build stronger, more prepared companies. Remember, persistence, focus, meticulous preparation, and strategic maneuvering are your greatest assets.

The Techstars team hosts virtual events regularly. These events are free and invaluable to anyone looking to develop their skills. Visit the Techstars events page to find out more about our upcoming events.

The Accelerator Hub is another great resource for founders interested in learning more about Techstars and the programs we offer.

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