The Hard Truths About Fundraising: 4 Lessons Every Founder Should Know
- Gregory Henson
- Mar 16
- 3 min read
Raising capital is often seen as the ultimate milestone for a startup. Founders chase investor meetings, perfect their pitch decks, and dream of landing that game-changing check. But after going through the process firsthand, I realized fundraising isn’t always what it seems.
At Henson Venture Partners, we’ve seen startups struggle with common fundraising pitfalls—ones that can make or break their trajectory. Here are four surprising truths about raising money that every entrepreneur should understand before they start pitching.
1. Fundraising is 90% Relationship Building, 10% Transactional
Investors don’t invest in pitch decks—they invest in people.
Many founders believe that if they craft the perfect deck, outline their metrics, and project big numbers, investors will be lining up to write a check. In reality, the best time to raise money is when you don’t need it.
✅ Build relationships early—your best investors may come from connections built years before they write a check.
✅ Stay in touch with investors long before you need capital. Fundraising happens on their timeline, not yours.
✅ Be someone they trust—most investors will back a solid team over a perfect business plan.
💡 Lesson learned: Fundraising is about trust, not just numbers. Play the long game.
2. A Signed Term Sheet Doesn’t Mean You Have the Money
One of the hardest lessons I learned? Nothing is real until the money is wired.
Even after investors sign a term sheet, deals can fall apart for countless reasons:
🔹 They get cold feet at the last minute.
🔹 Market conditions change unexpectedly.
🔹 A better opportunity comes along.
Many founders stop fundraising too early, assuming a signed term sheet means the deal is locked in. That’s a mistake. Always keep momentum going until the funds hit your account.
💡 Lesson learned: Term sheets don’t mean money in the bank. Always have a backup plan.
3. Venture Capital Isn’t a Magic Fix
A big funding round might sound like a dream come true, but taking venture capital comes with hidden costs.
🔹 VCs rarely offer hands-on help. Many don’t provide game-changing introductions or day-to-day support.
🔹 Bootstrapped companies often grow stronger. They control their own strategy and retain more equity.
🔹 Not every startup needs VC funding. There are other ways to scale—profitability, strategic partnerships, or customer-funded growth.
Before raising, ask yourself: Do I really need VC funding, or am I just chasing validation?
💡 Lesson learned: More money doesn’t equal success—execution does. Be sure you actually need VC money before you give up equity.
4. The More You Raise, The Less Control You Have
Every dollar raised comes with a price: control. Investors don’t just fund companies—they influence them.
🔹 Once you take money, you have a boss. Board meetings start feeling like performance reviews.
🔹 The more capital you raise, the more diluted your ownership becomes.
🔹 If you’re not aligned with investor expectations, you could be replaced.
Many founders don’t realize that raising money means being on someone else’s timeline. Investors expect rapid growth, scalability, and returns. If you’re not ready for that pressure, think twice before taking on capital.
💡 Lesson learned: Money comes with strings attached. If you want full control, consider alternative funding routes.
Final Thoughts: Fundraising Isn’t What You Think
At Henson Venture Partners, we advise founders to be strategic about raising capital. It’s not just about getting money—it’s about securing the right money, at the right time, from the right investors.
✅ Trust beats numbers—investors back relationships, not just pitch decks.
✅ A signed term sheet isn’t a guarantee—never stop fundraising too early.
✅ VC funding isn’t the only path—consider if you really need it.
✅ The more you raise, the more control you lose—funding comes with expectations.
Raising capital isn’t good or bad—it’s just a tool. Understanding these realities before you start fundraising will help you make better decisions for your company’s future.
💬 What surprised you the most about fundraising? Drop a comment below!
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