The Fatal Fundraising Mistake Most Founders Make

How 90% of founders sabotage their fundraising by making one critical error

Yesterday, I had a conversation that I’ve had hundreds of times before. A promising founder, bright-eyed and excited, told me about their recent meetings with several VCs. « They seem really interested, » they said, beaming with confidence. « I think we’re VC-ready. »

My heart sank. Not because their startup wasn’t promising, it was. But because they had just made the most fatal mistake in the VC fundraising playbook: they started talking to VCs too early.

If you’re a founder dreaming of raising venture capital, this might be the most important article you’ll ever read. Because the mistake this founder made isn’t just common, it’s endemic. And it’s killing startups before they even get a real chance to succeed.

The Seductive Trap of Early VC Interest

Picture this scenario: You’re a first-time founder with an interesting idea. You manage to get a few meetings with VCs, whether through warm introductions or, increasingly common, because VCs have reached out to you directly. To your surprise and delight, they seem engaged. They ask good questions, they nod at the right moments, and they end the meeting with that magical phrase: « Let’s keep in touch. »

You walk out feeling like you’ve cracked the code. You’re VC-compatible. You’re desirable. VCs will soon be fighting over you with competing term sheets.

This is the moment you lose the game.

What you’ve just experienced isn’t validation, it’s marketing. VCs have perfected the art of what I call « keeping optionality » or « non-committal enthusiasm. » They’ve learned to show just enough interest to keep you warm without making any real commitment.

Why? Because VCs, like any sophisticated investors, want to maintain their options. They want to see how your story develops, how your traction evolves, and most importantly, what other investors think of you. You’ve become a data point in their pipeline, nothing more.

The Uncontrolled Roadshow: Your Startup’s Death Spiral

Here’s what most founders don’t realize: the moment you start engaging with VCs, you’ve started a roadshow, one that you don’t control.

The VC community is smaller and more connected than most people imagine. As Oscar Pierre, founder of Glovo, perfectly captured in a recent interview with Harry Stebbings:

One thing I realized as a first-time founder when I spoke to VCs was that I thought I was having a one-on-one conversation. In reality, it’s more like broadcasting to the entire VC community. VCs talk all day, constantly sharing deals and intel with each other.

That ‘confidential’ conversation you had with one of the top London funds? It’s already been discussed in an internal meeting. The ‘casual coffee’ with a well-known Paris early-stage fund? They’ve already talked about you with three other firms in their network.

Without knowing it, you’ve started a countdown timer. Every day that passes without a term sheet is another day that your « story » gets stale in the VC community. Every lukewarm response gets shared. Every « no » creates a domino effect that makes the next « no » more likely.

The Fundamental Truth: Fundraising Is Complex Sales, Not Sales Without Marketing

Before we dive into timing, let’s establish a fundamental truth that every founder needs to understand: fundraising is a sales process. You’re selling equity in your company. That’s it. But here’s where most founders go wrong, they think they can execute a complex B2B sales process without any marketing.

Imagine trying to sell enterprise software to Fortune 500 companies by cold-calling CEOs with a 10-slide presentation. No market education. No thought leadership. No brand awareness. No relationship building. Just show up and pitch.

You’d be laughed out of the building.

Yet this is exactly what founders do when they approach VCs with nothing but a pitch deck and hope. They’re trying to execute one of the most complex sales processes in business, selling equity to sophisticated investors who see hundreds of deals every year, without doing any of the foundational marketing work.

In traditional B2B sales, you have hundreds or thousands of potential customers. In fundraising, you have maybe 20-50 relevant VCs who could lead your round. The stakes are higher, the competition is fiercer, and the sales cycle is more complex. If anything, you need MORE marketing, not less.

This is why the « VC lobbying » phase isn’t optional, it’s the marketing that makes your eventual « sales process » (the formal roadshow) successful.

The Anatomy of a Controlled Fundraising Process

The difference between a successful raise and a failed one often comes down to control. When you talk to VCs too early or too casually, you give up the three levers that matter most: timing, information, and competition. From that moment on, you’re not fundraising, you’re being evaluated, slowly, passively, and without leverage.

Let me show you how top founders actually do it :

Phase 1: The Silent Preparation – VC Lobbying & Thesis Evangelization (3-8 months)

This is where most founders get it wrong. They think preparation means perfecting their pitch deck. In reality, this phase is about VC lobbying, what I call the « marketing of your fundraising » long before you formally start raising.

Think of the film « Ridicule« , the young baron couldn’t simply walk up to Louis XVI and ask for money to drain his marshes. He had to master the codes of Versailles, build influence in the court, and demonstrate his wit before earning an audience with the king. You must influence the court before you can convince the king.

This phase has three critical components:

1. Crafting Your Unique Insight: As Martin Mignot brilliantly explained to Harry Stebbings: « What I love in founders is unique insight… they can come up with a very simple insight, something that sounds very simple but actually incredibly deep and profound and defensible. » Your unique insight isn’t just your pitch, it’s your first-principle thinking about why the world is changing and why your approach is inevitable.

2. Strategic Portfolio Intelligence: Here’s what separates sophisticated founders from amateurs: you must study and engage with entrepreneurs from your target VCs’ portfolios. These portfolio founders are your « courtiers », they have direct access to and influence over the partners you want to reach. Understanding their challenges, sharing insights about market dynamics, and building relationships with them creates multiple pathways to the VCs you’re targeting.

3. Thesis Evangelization: This phase isn’t about money. It’s about broadcasting your unique thesis, the sharp insight that makes people stop and think differently about the future. When you share it, you make others smarter, and that’s what creates “premium connections.” But more importantly, this is when you form the key relationships that will matter later. Your first targets aren’t VCs themselves, but industry heavyweights, well-connected founders, and people who orbit around venture firms. Many of them are already in close contact with investors. By consistently evangelizing your thesis, you’re not just spreading ideas, you’re sealing strong alliances with people who can vouch for you when the time comes. By the end of this phase, the right people should associate your name with a powerful and differentiated worldview.

Phase 2: The Warm-Up (2-4 weeks)

Now you activate those allies. The warm-up isn’t the time to create new relationships with VCs, it’s when you leverage the ones you’ve cultivated through evangelization. You selectively reach out to industry insiders, portfolio founders, and trusted connectors who already believe in your thesis. You let them know you’re preparing to raise, and ask if they can help with introductions when the time comes. Unless you have a very close VC relationship already, you don’t go directly to funds at this stage. The warm-up is about mobilizing your network so that, by the time you officially start fundraising, your target investors are already warmed up and curious.

Phase 3: The Lightning Strike (2-3 weeks)

This is the actual roadshow. You formally announce that you’re raising capital, and you create a compressed timeline where all investors must move quickly to evaluate and decide. Every meeting is scheduled within a tight window. Every follow-up has a deadline. Every partner meeting is calendared to occur within the same week across all funds.

Phase 4: The Close (1 week)

You create a competitive dynamic where multiple funds want to lead, and you can choose not just the best terms, but the best strategic partner for your company’s next phase of growth.

The Psychology Behind VC Decision-Making

Understanding why timing matters requires understanding how VCs actually make decisions. Despite what they might tell you, VCs are not purely rational actors evaluating opportunities in isolation.

They operate in a social environment where reputation, peer validation, and competitive dynamics play enormous roles. A VC who misses the next unicorn doesn’t just lose money, they lose standing in their industry.

This social dynamic is what creates the opportunity for sophisticated founders. When you control the process, you’re not just selling your company, you’re orchestrating a social proof cascade where each investor’s interest validates and amplifies the interest of others.

But when you lose control of the timing, the opposite happens. A slow « no » from one respected fund can poison the well for others. What should have been a competitive advantage becomes social proof that your startup isn’t worth the investment.

The Real Cost of Getting It Wrong

Let me be brutally honest about what happens when founders make this mistake:

Immediate Consequences:

Your fundraising takes 3-5x longer than it should
Even for the lucky one, you raise less money on worse terms.
You exhaust your network of introductions and become radioactive to VCs who’ve already passed
You waste months of precious runway and focus

Long-term Consequences:

You enter the VC game from a position of weakness
Your relationships with investors start on unequal footing
You set a precedent for future fundraising rounds
You potentially cap the ultimate outcome of your company

I’ve seen too many promising startups die slow deaths because they never recovered from a botched fundraising process. The market opportunity was real, the team was talented, the product had traction, but they lost the VC game before they even understood they were playing it.

Your Action Plan: What to Do Right Now

If you’re currently in the « casual VC conversation » phase, stop. Immediately. You need to either fully commit to a fundraising process or gracefully extract yourself from these conversations until you’re properly prepared.

Here’s your roadmap:

If you’re not ready to raise :

Politely withdraw from current VC conversations
Focus on building traction, refining your story, and preparing for a proper fundraising process
Use the next 6-10 months to build relationships and influence without asking for money
Identify the advisors who can help you orchestrate a proper fundraise

If you are ready to raise:

Immediately shift from casual conversations to a formal process with clear timelines
Expand your investor pipeline to create genuine competition
Set hard deadlines for all interactions and stick to them
Prepare for a sprint, not a marathon

The Coffee Myth, Debunked

If you spend enough time online, you’ll read the same piece of advice again and again: “Start building relationships with VCs early. Go grab coffees. Get to know them long before you raise.”

It sounds reasonable. But it’s misleading and in today’s market, it’s mostly obsolete.

So where did this idea come from?

VCs themselves have an incentive to spread it. One of their main jobs is sourcing deals. The more open and chatty founders are, the easier that job becomes.
There’s a strong belief among VCs that early relationships help them win allocations. If you’re already close to a founder when their roadshow begins, you have an edge. That belief has turned into muscle memory.
Founders used to reinforce it. Years ago, venture felt like a black box. Visibility was low, information was scarce, and being “in the room” mattered. Meeting VCs early felt like a badge of honor.

But today? The landscape has changed.

VCs are everywhere online. You can listen to dozens of interviews to understand how they think without giving away anything.
Many publish essays, podcasts, and market notes, you can study their worldview without revealing yours.
Their portfolios are transparent; you can analyze patterns and get warm intel from portfolio founders.

In other words, you don’t need a string of casual coffees to understand your target investors. You can stay in the shadows, do your homework, and only reveal yourself when the timing is right.

The Bottom Line

The VC fundraising game is not forgiving to amateurs. It rewards preparation,sophistication, and strategic thinking. It punishes naivety, impatience, and wishful thinking.

Every day, I watch brilliant founders with genuinely promising companies sabotage their fundraising before it even begins. They make the fatal mistake of starting too early, losing control of the process, and entering a game they don’t understand.

Don’t be one of them.

The stakes are too high, the competition is too fierce, and the margin for error is too small. If you’re going to play the VC game, play it at the highest level. Because at this level, there are no participation trophies, only winners and everyone else.

Are you ready to build a compelling equity story that influences VCs before your roadshow? At Mighty Nine, we help ambitious founders master the VC game through strategic storytelling and influence building. Because fundraising success isn’t about having the best product, it’s about having the best story and knowing how to tell it to the right people at the right time.

Want to discuss your fundraising strategy? Reach out at julien@mighty9.co