Cash is king and, as a pre-revenue company, raising venture capital is often a critical step in the success of your business. Even if you have friends and family willing to be your first angel investors, you can’t always count on friends and family to provide enough cash to get your company to the point of profitability. Startups burn through a lot of capital just getting off the ground and sustaining growth before they turn a profit, and so raising venture capital from sophisticated investors can be critical for feeding that initial burn.
While you may know that your business is one that could benefit from venture capital funding, or even how much you want to raise, you might not know at what point you should try to fundraise.