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Raising Money After a Rough Patch? At Least Put Up 3 Good Months in a Row

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So it may surprise some of you to learn that it’s not >that< hard to raise venture capital after a rough patch — if things reaccelerate.  In fact, it’s pretty common.  VCs know the vast majority of startups have a tougher time or two.

But … but … VCs need some proof you are back to growth.   They need at least 3 months of continuous, strong growth.  

So this is a super simple post, but I think an important one.  VCs know sometimes, something changes.  A new great VP.  A change in the market.  An amazing feature.  Sometimes, it’s just timing.  Sometimes, great startups are too early to a market.  Procore didn’t really take off until the iPad did.  UiPath took 10 years to get to $1m ARR … and then it exploded to $1B in ARR.  It was early to automation.

3 months though, is the minimum.  VCs really will fund someone with 12 months of low growth.  But then you need proof it’s changed.  3 months — minimum.  4 is even better.

Get 3-4 great months of growth under your belt, then go raise that VC round.  

Look at the chart above. You’ll see two stories in one simple chart. 

The first, of a startup that got a handful of customers,. but then struggled.  And the second, of a startup that then finally made it all click.  That’s now leaving the station.

That’s the one earlier stage investors want to bet on.

A related post here:

Look, No VC Wants to Fund a Startup With So-So Growth. Except Maybe Your Existing Investors.

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