In 2023, startups felt the impacts of high interest rates, lower funding, and layoffs. These challenging conditions left some startup founders wondering how to raise venture capital funding to support their company’s growth.  

But this year the venture capital landscape is looking ready for a rebound. If you’re a startup founder looking for early-stage funding as the tides turn, tapping into some startup fundraising tips can help prepare you for your next round. 

Recently, I connected with Lily Lyman, General Partner at Underscore VC, a Boston-based early-stage venture firm focused on pre-seed & seed-stage investments. We talked about what Underscore looks for when evaluating founders to invest in. Read on for her tips for raising capital in 2024. 

7 startup fundraising tips from a VC: How to raise venture capital funding in 2024 and beyond 

Here’s what Lyman recommends you do if you’re looking for funding in 2024: 

1. Clearly state the problem you’re solving. 
2. Emphasize the strength of your team. 
3. Prove there's a market opportunity. 
4. Show up positively in the fundraising round. 
5. Nurture warm investor connections. 
6. Build a high-quality pitch deck. 
7. Perfect your operating plan, cap table, and data room. 
   
   

Clearly state the problem you’re solving.

As you reach out to investors, you’re going to need a concise elevator pitch that describes your company. There should be no confusion about the problem you’re trying to solve with your startup. Make sure you can summarize it in a few sentences to share with potential contacts. This pitch should convince anyone of the validity of your company in just a few minutes.  

Emphasize the strength of your team.

Once you explain the problem your startup is working to solve, the next question you’ll likely be asked is why you’re the right one to solve this problem. This question is why Underscore puts so much emphasis on the team of each startup looking for funding. 

“The most important things that we look for are team, market opportunity, and value prop," Lyman said.  

“And when we talk about team, we are looking for some specific attributes of the founder themselves. We are looking for a unique insight or unique experience that gives them an edge to being successful in going after this endeavor.” 

Be prepared to explain why you and your team are the ones to solve this problem, and how you plan to do just that.  

Prove there's a market opportunity.

Potential investors also want to see that there’s plenty of room in the market for your product or service.  

“Is the problem that you're solving a big enough pain point to your target customer that they'll be willing to pay for it?” Lyman said.  

Not only should you demonstrate a current market opportunity, but also that there’s enough to sustain your business as it grows. 

Show up positively in the fundraising round.

Another tip Lyman offered was to show up as your best self. Every interaction you have from emails to the first meeting, and the materials you prepare for due diligence has weight. Each touchpoint is a chance for the VC firm to evaluate you, and vice versa. 

Nurture warm investor connections.

A warm connection to a potential investor will likely get you further than a cold one. This means you should leverage your existing relationships to get introductions to potential investors. You should also make sure you’re making the right connections; not all VC firms will be the right fit for you. Do your research, understand the firms and investors, and build a foundational relationship before it comes time to fundraise. 

Build a high-quality pitch deck. 

Compile all your hard work into a clear and concise deck that is sure to convince any investor. This deck should include the details above, like the amount of funding you’re looking for and why, what problem you’re solving, why you’re the one to do it, and the nitty-gritty details of the company’s finances thus far. 

Perfect your operating plan, cap table, and data room.

It’s important to prepare your foundational elements before looking for financing. Spend time preparing your operating plan, cap table, and data room. Your data room should contain all of the relevant forms, contracts, and other documents relevant to the business in one secure location. You should be able to accurately display the current state of your business, who owns shares or might in the future, and details about how much funding you’re looking for and why.  

Stay fundraising-ready with Fidelity Private Shares  

Whether you’re at the stage of looking for capital or just starting to formulate a business idea, it’s an exciting time in the startup world. Mature companies are starting to spin out new entrepreneurs looking to build their own startups, Lyman explained.  

“I think it's a great time to be building because you can get access to really good talent and there's still capital out there for the entrepreneurs that have the grit to build in this environment,” Lyman said. “I think some of the best companies are going to be built in this chapter.” 

There’s a lot to consider when you’re learning how to raise venture capital funding. It’s best to have some tools to help you keep it all organized. Fidelity Private Shares offers an all-in-one equity management platform to automatically update your data room, keep your cap table organized and accurate, help with scenario modeling, and much more.  

Get in touch with our team to learn how Fidelity Private Shares can help you along your journey to raise venture capital funding. 

Fidelity and Underscore VC are not affiliated 

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