18 mistakes founders make when raising a round

Starting the raise when the money is about to run out

Why it costs you. A round takes months: our guide is 4‑6 months for a seed round from the start of preparation to closing. With three or four months of cash left, the founder negotiates under pressure and takes the first terms on the table.

What to do. Start preparing while you still have more than a year of cash, and decide in advance the date by which you will cut costs if the round has not closed. The fund a16z calls raising with less than 12 months of runway a negative signal to the market.

Source: a16z, A Framework for Navigating Down Markets, 2022

Raising “as much as we can” instead of an amount tied to a plan

Why it costs you. Investors ask what the money will buy. An amount without a plan looks like a guess, and a round that is too small runs out before the company reaches the numbers the next investors want to see. Rounds are now about two years apart: companies on Carta that raised a Series A in Q4 2024 had waited a median of 774 days since their previous round.

What to do. Size the round from an 18‑24 month plan: hires, product, marketing. The money should get you to the next round's milestones with 6 months to spare. Carta now advises planning for at least 24‑30 months of runway.

Source: Carta, Startup Funding: A Guide to Raising Startup Capital

Setting the valuation by a friend's round or a headline

Why it costs you. A valuation your numbers can't support makes the next round harder. If the next round is priced lower, anti-dilution clauses give earlier investors extra shares at the founders' expense, and the team's options lose value. About one round in eight is priced lower: 12.8% of the deals handled by the law firm Cooley in Q4 2025 and 12.1% in Q2 2026.

What to do. Anchor on comparable rounds at your stage, sector and region, and on how much of the company you are ready to sell. Founders usually sell about 20% in a round: the median was 19.4% at seed and 18.7% at Series A (US companies on Carta, Q2 2026), and Y Combinator advises against selling more than 25%.

Source: Cooley, Venture Financing Report Q4 2025 and Q2 2026; Carta, Series A Funding guide, 2026; Y Combinator, A Guide to Seed Fundraising, 2016

A “hockey stick” model with nothing behind it

Why it costs you. An investor quickly checks whether revenue follows from the number of customers, the price and conversion. A line that triples every year “because the market is huge” undermines trust in the rest of the deck.

What to do. Build revenue from the bottom up: leads, conversion, customers, average check, churn. Use three scenarios, and give every assumption a source or your own data.

Not knowing your unit economics

Why it costs you. A seed fund's first questions: how much a customer costs to acquire, how much they bring and how fast that cost pays back. “We'll work it out after the round” usually means there will be no round.

What to do. Calculate customer acquisition cost, gross margin per customer, payback period and retention by monthly cohort, even if you only have six months of history.

Different numbers in the deck, the model and the accounts

Why it costs you. Due diligence starts with reconciliation. Revenue in the deck that doesn't match the bank statements is the fastest way to lose a term sheet: after that, the investor doubts every other number.

What to do. Keep one source of truth: monthly management accounts reconciled with the bank. The deck and the model take their numbers from there.

Company money mixed with personal money

Why it costs you. Personal spending paid by the company, revenue on the founder's card, loans from relatives without paperwork: in due diligence each of these becomes a question, and the round waits until it is cleaned up.

What to do. Separate accounts, a monthly close, signed loan agreements and a list of related-party transactions ready for the data room.

Co-founders without vesting

Why it costs you. If a co-founder leaves after a year with 30% of the company, the rest of the team keeps working for that stake. Investors see this as a risk and will ask for vesting anyway, so it is better to set it on your own terms.

What to do. Agree on vesting before the round: the standard is four years with a one-year cliff. That is how it is usually written: in the UK, 58% of 2025 term sheets included founder vesting, most often over four years with a cliff.

Source: HSBC Innovation Banking, Founder vesting, based on its Venture Capital Term Sheet Guide 2026

Several SAFEs and no idea how much of the company is left

Why it costs you. Each post-money SAFE fixes the investor's share at its valuation cap, so every new SAFE dilutes the founders rather than earlier SAFE holders. Many founders find out only at the priced round that the team owns far less than they thought.

What to do. Keep a cap table that shows ownership after all SAFEs and notes convert, and model the next round before signing a new SAFE.

Source: Y Combinator, Post-Money Safe User Guide

Shares promised verbally

Why it costs you. “You'll get 2%” said to an early employee or adviser without a document turns into a claim during due diligence, and investors want a clean cap table.

What to do. Put every promise of equity in writing, through an option plan with vesting, and keep a list of all promises for your lawyer.

Intellectual property that doesn't belong to the company

Why it costs you. Code written by a freelancer, or by a co-founder before the company was set up, belongs to its author unless the rights are transferred. Funds check this, and without the transfer there is no deal.

What to do. Sign IP assignment agreements with all founders, employees and contractors, and register domains, trademarks and repositories to the company.

Writing to investors who don't do your stage, check size or sector

Why it costs you. A fund that writes $5M checks won't lead a $500K pre‑seed, and a B2B software fund won't back a consumer brand. Each mismatch costs a week and a “no” that other investors may hear about.

What to do. Build a list of 50‑100 investors checked by stage, check size, sector, geography and deals in the last 12 months. Put funds that lead rounds first.

Meeting investors one at a time for months

Why it costs you. Interest fades, offers don't overlap, and the first fund to make an offer sets the terms.

What to do. Prepare everything before the first meeting and hold the meetings within 4‑8 weeks, so that term sheets arrive close together.

A deck where the numbers are on slide 15

Why it costs you. DocSend, a service founders use to send decks, finds that investors spend less than three minutes on one. If traction is buried at the end, it is not seen.

What to do. Use 12‑15 slides, with the problem, the product and the numbers that prove demand in the first five. Keep a detailed version for after the meeting.

Source: DocSend (Dropbox), How DocSend data helps founders build better pitch decks, 2025

No data room when interest appears

Why it costs you. After a good meeting, an investor asks for documents within days. If collecting them takes weeks, the fund moves on to other deals and the round loses momentum.

What to do. Prepare the data room before the first meeting: corporate documents, cap table, financial statements, key contracts, IP, team agreements and answers to 30‑50 standard questions.

Looking only at the valuation in a term sheet

Why it costs you. A higher valuation with a 2x participating liquidation preference (at a sale the investor first takes back twice the investment, then also takes its share of the rest) can leave founders with less money than a lower valuation with a standard 1x non-participating preference. Almost every deal has the standard one: of the 166 rounds the law firm Cooley handled in Q2 2026, 95.8% had a 1x preference and 96.4% were non-participating.

What to do. Compare term sheets by what each side receives if the company sells at 1x, 3x and 10x the round's valuation. Check the preference, anti-dilution, board seats and veto rights.

Source: Cooley, Q2 2026 Venture Financing Report

Agreeing to a large option pool before the money

Why it costs you. A pool created before the round is paid for by existing shareholders only, so every extra point of pool comes out of the founders' share. On Carta, the median pool at seed is 12.1% of the company.

What to do. Size the pool from your hiring plan for the next 18‑24 months and negotiate the number on that basis. Investors often push for a large pool, but Carta's data suggests starting at 8‑10% and expanding it in later rounds.

Source: Carta, Founder Ownership Report 2026; Carta, Term Sheets Guide for Startups

Spending the money before it arrives

Why it costs you. A term sheet is not money: deals still fall apart during due diligence. Hires and leases signed against a term sheet become obligations the company can't cover if the round collapses.

What to do. Commit to new spending only after the money is in the account, and keep growing the business during the round: investors watch the numbers month by month.