Avoid These Fundraising Pitfalls

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SDS 067: Avoid These Fundraising Pitfalls

Hey! thank you for reading issue 067 of Startup Definition Sunday (SDS). You can read past issues here.

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Now to Today’s Issue

Over the years, I’ve had the privilege of investing in over 20 early-stage startups and helping dozens more secure their first funding rounds. Additionally, I receive countless DMs and emails from emerging founders asking for advice on raising capital.

Along the way, I’ve noticed certain recurring mistakes, avoidable ones, make investors hesitant to fund startups. These missteps are especially common for first-time founders.

Let’s explore the top 3 fundraising mistakes and, more importantly, how you can avoid them.

1. Underestimating the Sales Cycle

Too often, I meet founders who assume that because their solution is painfully needed, customers will line up to buy after reading a blog post or downloading a white paper. Especially in the African market, where trust-building and relationship-driven sales are paramount, this approach works up to a point.

Here’s the reality: solving a problem isn’t enough if your sales strategy doesn’t account for a longer, trust-driven process. Customers often take time to navigate internal decision-making, see the value, and commit to a new solution. Relying only on content-driven strategies can stall your revenue growth.

What to do instead:

• Map out your customer’s decision-making journey, including how long it takes for them to move from awareness to purchase.

• Invest in building relationships through direct sales, partnerships, and trust-building tactics.

• Be prepared for longer cycles in B2B or enterprise sales and bake that into your runway planning.

2. Misaligned Valuation Expectations

Let’s talk about valuation. Early-stage startups are inherently risky, that’s the nature of the game. Yet, some founders walk into conversations with investors demanding valuations that simply don’t match the stage or risk profile of their business.

Here’s the thing: investors want to collaborate with you to build value over time, not feel like they’re being squeezed at the riskiest point in your company’s life cycle. Founders who understand this and take a pragmatic, risk-aware approach to valuation are far more likely to close their rounds.

What to do instead:

• Research comparable valuations for startups at your stage, in your region, and industry.

• Focus on the bigger picture: securing the right partners now sets the stage for greater success in future rounds.

• Be open to feedback and negotiation; it shows maturity and a willingness to collaborate.

3. Compromising Integrity

This may seem like common sense, but it’s worth emphasizing: integrity is non-negotiable. Founders who lie about their numbers, traction, or which investors are “looking at the round”, will almost always lose investor trust.

Why is this such a big deal? Because integrity is non-negotiable. If I can’t trust what you’re saying during diligence, how can I trust you to navigate the ups and downs of running a startup?

What to do instead:

• Be transparent. If you don’t know the answer to a question, say so and commit to finding out.

• Never inflate your traction or exaggerate investor interest. The truth always finds its way out.

• Build credibility by being consistent, honest, and realistic in your communication.

My Two Pesewas

Mistakes happen, and that’s okay. It’s part of the founder journey. But these three mistakes? They’re avoidable. By being intentional about your sales strategy, valuation approach, and integrity, you can position yourself as the kind of founder investors want to back.

If you found this helpful, share it with another founder in your circle. Let’s equip more emerging founders with the insights they need to thrive.

That's all for today. As always, thank you for being an engaged reader. Let me know your thoughts on this issue. I’d love to hear your experiences or tips on navigating tough decisions in leadership.

Until next time,

Jasiel

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