The Raise and Investor Relations

Fundraising, stripped of mystique, is a sales process — you're selling equity to investors — and it runs on the same fundamentals as any sale: a compelling pitch, momentum, and the leverage that comes from having options. Most founders approach it as supplication (please fund me) rather than as a mutual evaluation between parties choosing each other, and that framing costs them. And the relationship doesn't end at the wire transfer: your investors are your partners for years, so how you choose and work with them matters long after the round closes.

By Pratik Dhanave · July 26, 2026 · 8 min read

#Startups #Fundraising #Venture Capital #Business Strategy #Evaluation

If raising is the right choice, how does it actually work? This final post covers the fundraising process — preparing, pitching, and closing — how to think about choosing investors, and investor relations after the round. It’s the practical “how to raise” complement to the series’ “what funding is.” The goal is to demystify the process and frame it correctly: as a mutual evaluation and the start of a long relationship, not a one-way plea.

Fundraising is a process

Raising money is a process with distinct phases, and treating it as such (rather than an ad-hoc scramble) makes it far more effective:

Prepare first. Before approaching investors: know how much you’re raising and why (what milestones it funds), have your materials ready (a clear pitch/deck telling your story, and the key facts investors will want), understand your own numbers and cap table, and be clear on the terms you want. Preparation includes being ready to answer hard questions about the business. Going in unprepared wastes the limited chances you get with each investor.
It takes time and focus. Fundraising is time-consuming and demanding — it pulls founders away from running the business, so it’s best run as a focused effort over a defined period rather than dragging on indefinitely. Concentrating the raise (many investor conversations in a compressed window) also helps create momentum (below).
It’s a funnel. Like sales (the GTM series), fundraising is a funnel: you talk to many investors, most say no, and you need enough at the top to get the few yeses you want. Rejection is normal and expected — a “no” is usually just “not a fit,” not a verdict. Running a broad enough process and not being discouraged by the many nos is part of the discipline.

Framing fundraising as a prepared, focused, funnel-shaped process — rather than a mysterious event or a series of one-off asks — makes it more effective and less demoralizing. It’s a campaign to run well, with preparation, momentum, and the expectation that most conversations won’t convert.

Pitching and creating momentum

At the core of the process is the pitch — communicating your business compellingly to investors — and the dynamics of creating momentum:

The pitch tells a compelling story. Investors are deciding whether to bet on your company’s potential, so the pitch must convey: the problem and opportunity (is this a big, real opportunity?), your solution and why it’s compelling, evidence/traction so far (why believe it’s working?), the team (why you can pull it off), and the plan (what the money achieves). Clarity and a compelling narrative matter — this is the same value-communication skill as positioning in the GTM series, applied to investors. You’re selling the opportunity to be part of something big.
Momentum is leverage. A key dynamic: fundraising benefits enormously from momentum and competition. When multiple investors are interested, you have leverage (better terms, valuation, the ability to choose) and interest becomes self-reinforcing (investors want what other investors want). This is why founders run a focused, compressed process — to generate parallel interest and momentum rather than sequential one-off conversations where any single no stalls everything. Creating a sense that the round is coming together (real interest, a filling round) attracts more interest.
The best position is having options. The strongest fundraising position is not needing any single investor — having multiple interested parties so no one deal is do-or-die. That optionality gives you negotiating leverage and lets you choose the right investor on the right terms. Conversely, desperation (needing one specific yes) is a weak position. Running a broad process to create options is how you get leverage.

Pitching well (a clear, compelling story about a big opportunity) and creating momentum (a focused process generating parallel interest and thus leverage) are the heart of raising effectively. The founder with multiple interested investors is in a fundamentally stronger position than one pursuing a single lead — which is why the process is run to create exactly that.

Choosing investors

A crucial and often-underappreciated point: who you take money from matters, often more than the valuation — because investors are long-term partners, not just capital:

Investors are partners for years. An investor relationship typically lasts many years (until an exit) — they’ll be on your cap table, possibly your board, involved in major decisions. So you’re not just taking money; you’re choosing a long-term partner. A great investor helps enormously (guidance, connections, credibility, support in hard times); a bad one can be a source of friction, pressure, and pain for years. Choose accordingly.
What to look for. Beyond capital: relevant experience and expertise (do they understand your space?), a helpful network (can they open doors?), reputation (does having them signal quality and attract others?), how they behave (supportive vs difficult, especially when things go wrong), and alignment (do they share your vision for the company, its pace, and its goals?). Alignment especially matters — an investor who wants a different trajectory than you creates chronic conflict.
Do your own diligence. Just as investors evaluate you, evaluate them — talk to founders they’ve backed (especially ones whose companies struggled, to see how the investor behaved in hard times), understand their reputation and style. Fundraising is mutual evaluation: you’re choosing each other. Founders often forget they’re also selecting, not just being selected.
Terms and valuation aren’t everything. As the term-sheet post stressed, a slightly higher valuation from a worse investor (or with worse terms) can be a bad trade against a great investor at a lower valuation. The investor relationship’s quality often outweighs marginal differences in the number.

Choosing investors well — treating it as selecting a long-term partner on fit, help, reputation, behavior, and alignment, not just taking the highest offer — is one of the highest-leverage funding decisions, because the relationship long outlasts the transaction. The right investor is a multi-year asset; the wrong one, a multi-year liability.

Investor relations after the round

Funding doesn’t end when the money arrives — the relationship continues, and managing it well matters:

Communicate regularly and honestly. Good investor relations means keeping investors informed with regular updates — progress, metrics, and (importantly) problems, not just good news. Transparent, consistent communication builds trust and makes investors more willing and able to help. Hiding problems until they’re crises damages trust and forfeits help you could have gotten early.
Use investors as a resource. Good investors want to help (their return depends on your success) — so leverage them: ask for advice, introductions, help with hiring or customers or the next round. Founders who engage investors as partners get far more value than those who treat them as just a source of capital. The relationship is an asset to use, not just an obligation.
Manage the board well. If investors have board seats, running effective board meetings — informed, honest, focused on the real issues and decisions — makes the board a source of guidance rather than a chore or a threat. Good board management is part of investor relations and of running the company.
Honesty in hard times matters most. How you handle investors when things go wrong (missed targets, pivots, difficulties) is the real test — early, honest communication and a clear plan build trust and support, while hiding problems destroys it. And a good relationship built in good times is what you draw on in bad ones. This is where the choice of investor pays off: good partners help you through hard times; the wrong ones make them worse.

If raising is right, run it as a prepared, focused, funnel-shaped process; pitch a compelling story and create momentum (which is leverage); choose investors as long-term partners on fit and helpfulness, not just the highest offer; and manage the ongoing relationship with honest, regular communication that makes investors an asset. That completes the series: from what funding is and its stages, through equity/dilution, valuation, instruments, and terms, to alternatives and the raise itself. Funding, understood well, is a tool to use deliberately — and this post is how to use it, if and when it fits.

Key takeaways

Fundraising is a process to run deliberately: prepare first (know how much/why, have clear materials, understand your numbers and desired terms), run it as a focused, time-boxed effort (it pulls you from the business, so compress it), and treat it as a funnel where most investors say no (rejection is normal — usually “not a fit,” not a verdict).
The pitch must tell a compelling story about a big opportunity (problem, solution, traction, team, plan) — the same value-communication skill as positioning — and momentum is leverage: running a focused, compressed process generates parallel investor interest (self-reinforcing) so you have options, and the strongest position is not needing any single investor.
Who you take money from often matters more than the valuation, because investors are multi-year partners (on your cap table/board, in major decisions) — look for relevant expertise, a helpful network, good reputation, supportive behavior (especially in hard times), and vision/pace alignment, and do your own diligence (talk to founders they backed, including struggling ones) since fundraising is mutual evaluation.
Terms and valuation aren’t everything — a great investor at a lower valuation can beat a worse one at a higher number, because the relationship’s quality outlasts and outweighs the marginal difference in the figure.
Investor relations continue after the round: communicate regularly and honestly (including problems, not just good news), use investors as a resource (advice, introductions, hiring/customers/next round — good ones want to help), manage the board well, and above all be honest in hard times — which is where choosing the right investor pays off, as good partners help you through and the wrong ones make it worse.