VC Panel: When and When Not to Raise Venture Capital

Venture capital isn’t for everyone. In fact, less than 1% of startups ever secure VC funding—so understanding whether it’s the right path for your business is crucial.

To shed light on this, a panel of seasoned investors shared their perspectives on what makes a company “VC-backable,” the challenges of fundraising, and the common mistakes founders make when seeking investment.

Among them, Lina Chong, a partner at Target Global, brought insights from working across multiple verticals, highlighting where VCs are placing bets in today’s market. Philippe Klitzing, an investor and partner at Peak Capital, spoke candidly about the realities of deal flow and why networking is often more important than a cold pitch. And Marie-Helene Ametsreiter, a partner at Speedinvest, explored how market size, founder resilience, and strategic timing all play a role in securing investment. The panel was moderated by Julius Göllner, co-founder of ARRtist.

Their discussion offered a rare look inside the VC mindset—how investors assess startups, what red flags they watch for, and how founders can improve their chances of success.

This guide distills their insights into clear, actionable takeaways to help you determine whether venture capital is the right move for your business—and, if it is, how to navigate the process effectively.

When NOT to Raise Venture Capital

Many founders assume VC funding is the natural next step—but it only makes sense for businesses that can scale fast and deliver massive returns. Investors need to see the potential for at least a 10x return. If your business can thrive on organic growth or smaller funding sources, VC might not be the best fit.

Actionable Insight:

Before pursuing VC, ask yourself: Can my business realistically scale to hundreds of millions in revenue? If not, alternative funding strategies may be a better path forward.

What Makes a Market "Big Enough" for VC?

It’s not just about market size—it’s about understanding the market deeply. Investors look at whether the total addressable market (TAM) is large enough and whether your business model can support significant revenue growth.

Actionable Insight:

A niche market can still be viable for VC if your company has the potential to dominate it and scale efficiently. Know your numbers, validate them, and be ready to prove how your business fits in.

More Than an Idea: Why Founder Resilience Matters

VC-backed companies aren’t just building businesses—they’re chasing exponential growth. That’s why investors don’t just evaluate the idea; they evaluate the founders themselves.

Philip Meyer emphasized that early-stage VCs often bet on the team more than the product, especially in industries where founders may need to expand or even create new markets. Investors look for founders with a hustling mentality, the ability to prioritize, and a persuasive storytelling ability—because fundraising and hiring both require strong storytelling.

Actionable Insight:

Ask yourself: Am I ready for the pressure of VC-backed growth? If you’re balancing major personal obligations or don’t thrive in high-stakes environments, bootstrapping or alternative funding might be a better fit.

The Reality of Networking in Fundraising

A compelling pitch deck isn’t enough—who you know matters. More than 70% of VC deals come from warm introductions rather than cold outreach. Lina shared that investors rely on trusted networks of angels and early-stage investors to filter opportunities before they even reach their desks.

That means first-time founders need to focus on building relationships early. Angels and experienced entrepreneurs can serve as powerful connectors, increasing your chances of getting in front of the right investors.

Actionable Insight:

Start networking before you need funding. Engage with angels, attend industry events, and build relationships with other founders who can introduce you to VCs when the time is right.

Fundraising While Running a Business: Balancing Both

Raising capital is a full-time job. Founders must plan ahead and delegate responsibilities to keep their business running while they secure investment.

Actionable Insight:

Before launching a fundraising round, streamline internal operations and prepare your team so you can dedicate the necessary time and energy to investor conversations.

Timing Your Fundraising Efforts

The timing of your raise can make or break your round. Investors are more likely to engage when your company is hitting key milestones and showing momentum. Avoid slow periods like major holidays when decision-making slows down.

Actionable Insight:

Plan your raise around growth inflection points—when you can show strong traction, new customers, or key hires. Cluster investor meetings to create a sense of urgency and competition.

How Much to Raise: More Than You Think

Startups often underestimate how much capital they’ll need.LinaSchmidt advised founders to raise slightly more than their immediate needs, as unforeseen challenges can quickly drain resources.

Actionable Insight:

Plan for a buffer. Fundraising takes time, and unexpected expenses will arise—so make sure you secure enough capital to sustain growth.

Choosing the Right Investors

Investors bring more than money—they bring connections, industry expertise, and strategic guidance. The right VC partner should align with your long-term vision and offer more than just a check.

Actionable Insight:

Look beyond valuation. Choose investors who provide real value, whether it’s deep domain expertise, strong networks, or operational support.

The Role of Business Angels

Business angels can be game-changers in early-stage fundraising. They invest quickly, provide valuable industry knowledge, and help position your company for later VC rounds. Plus, having respected angels on your cap table can serve as a strong signal to VCs.

Actionable Insight:

Target experienced angels who understand your space and can actively support your company—not just provide funding. Their endorsement can help open doors to larger investors.

Final Thoughts: Fundraising as a Long-Term Strategy

Raising VC funding isn’t just about securing capital—it’s about building a long-term partnership with investors who will be involved in your company’s trajectory for years.

As Marie noted, successful fundraising requires more than a great product—it requires the right team, network, timing, and market opportunity. And perhaps most importantly, it requires knowing whether VC is even the right path for your company in the first place.

Actionable Insight:

Treat fundraising like a strategic function, not a one-time event. Build investor relationships early, refine your narrative, and be intentional about who you bring on board.

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Note: This blog post is an AI-generated summary of the video using Arbor Storytelling Platform, with subsequent refinements made by the writer and our editorial team to ensure clarity and engagement.