Over the past several years, I’ve raised several rounds of funding for my startups. I’ve also helped several other startups with their fundraising processes as a fundraising coach. While there’s no easy way to fundraise, there are some tips that bring method to madness:

Plan Ahead

If you know you’ll be fundraising in the next three to four months, start planning ahead of time. Depending on which round you’re looking to raise (seed, Series A, B, etc.), prepare a list of potential angels and/or venture capitalists. You can start with an online search or ask friends who are entrepreneurs or investors. If you’re part of an incubator, then this exercise becomes relatively simpler.

During our first round at my last startup, we didn’t follow this approach and were rushed in the end. This is never a good thing, as your tendency to make sub-optimal choices is higher when the clock is ticking.

Do Your Homework to Establish Fit

I can tell you from experience that a lot of entrepreneurs, especially first-timers, don’t do a good job at this. Once you have your initial list ready, refine it based on investment thesis and fit.

The first step is relatively easy since you can find that information (sector focus, what stage they typically invest in, fund size etc.) online by looking at their website and portfolio. Fit requires more work: Given that an investor’s inbox is always filled with cold outreach, they tend to mostly take meetings that come through a trusted source to make the process efficient.

Try to find people in your network who can introduce you to the angel or someone at the firm (preferably a partner) if it’s a fund. You can also ask for introductions to founders of portfolio companies. Founders are a pretty powerful source for connecting with angels/VCs; they’re in the “trusted circle” since the investor has already made a bet on them. I gained several of my investors through founder recommendations.

Don’t Ask For Money Right Off the Bat

The reason you do this exercise three to four months in advance is so you don’t pitch or ask for money in the initial meeting. Yes, you heard that correctly: You should first get to know them, build a relationship and evaluate if they are interested in you and your idea. But what exactly do you talk about?

I’ve heard great advice on this from different experts. Ask them for their thoughts on the sector and hold a genuine brainstorming session on your business. Keep it brief, ask for advice, and ask if they can help with recruiting and sales leads. If they agree to help, that’s a positive sign. You can mention that you might be raising a round at a later date, and inquire if they’re interested in setting up a meeting closer to the process.

We followed this process for my current startup, and it has worked out quite well. This is because both sides know what they’re doing, but neither side is desperate nor under pressure to make a decision. This will also help you further refine your list for the folks who might be hot leads when you start raising in a few months.

Prepare Your Pitch

I’ve advised multiple startups on pitch preparation, and almost always, founders take too long to get to the point. Hit your big points on the 30-second, one- and two-minute marks of your pitch, or else your chances of success diminish substantially.

Yes, you may have already heard this before, but let me repeat it: follow the KISS principle (Keep It Short and Simple). Keep the main deck between seven and 15 slides, and pack all the powerful content up front. Be sure to include slides on your team, PSR (problem, solution, results), market size, a competitive overview with your differentiation, current metrics, future milestones and projected use of funds.

You can and should have a detailed appendix, but remember, it’s an appendix for a reason. It should be used to offer additional details and answer specific questions.

Be Aware of The Nuances of Different Stages

Having raised or helped startups raise multiple rounds, there are clear differences in fundraising strategies depending on the stage. This is especially important for first-timers. Depending on your round, here are a few best practices:

• Seed/Angel. In this stage, it’s mostly about the founding team, so focus on that. Investors are interested in the idea, but they’re more interested in you. Once you like an angel or early-stage investor, make sure you hold several meetings in both formal and informal settings. Showcasing your working prototype, minimum viable product, customer pilot results or initial traction are big pluses.
• Series A. These rounds are mostly VC-led. Unless you’re inventing new technology that will disrupt the market (think Google search), investors will want to see that you’ve established product-market-fit and have gained some initial traction with actual customers/users. Here, having a list of referenceable customers will come in handy. It’s an in-between stage where you’re still in the early adopter curve, hence team and vision still play an important role. Be sure to show how the raise will take you to the growth stage.
• Series B and beyond. This round is all about growth metrics and numbers. A charismatic founder or team can help increase valuations, but don’t expect to get top investors on board using only your story with no actual metrics behind it. Be sure to have conversations in advance with your board, advisors and potential investors on what it will take to raise the next round, and manically focus on delivering those numbers.

The next time you’re looking to fundraise, start early and go through the process in a more structured manner. Fundraising isn’t easy, but the above tips will make the process more efficient and prepare you for an optimal outcome.

The startup journey is similar to a survivor’s journey, and the last person standing is not necessarily the strongest or the smartest, but the person with the most skills who manages to outlast the other players. But before you start your adventure in the mysterious land of startups and possible unicorns, make sure that you are prepared. Here are five key components of the entrepreneur’s total startup capital that you should think about.

Industry

Pick the industry that will be the most advantageous considering the skills and expertise of you and your team. Keep in mind that some industries are more competitive because they have lower barriers to entry and do not require a significant amount of capital. Other industries are less competitive but are more complex and capital-intensive. Pick your industry carefully, and do not disregard factors such as regulations, the velocity of change and emerging new technologies.

In the fintech industry, for example, the regulators are slow-moving and approvals are often required from financial regulators such as Financial Industry Regulation Authority (FINRA) and the Securities and Exchange Commission (SEC). I know this because it took the company I co-founded almost eight months to obtain the funding portal license. The best advice I learned is this: Find an expert who has already been through the same process who you can learn from.

Experiences

Gather as many experiences as possible and develop as many skills as you can. For example, if your software relies heavily on a specific application program interface (API), then make sure you personally have a general understanding of it. This will help when your team is developing the software and during the integration process. If one of your software’s major integrations is payment services, make sure to read its API documentation or ask one of your software engineering peers for some help.

Advice

You likely have access to knowledgeable advisors, from VPs of major startups to successful entrepreneurs. Remember that every piece advice should be taken with a pinch of salt and some careful consideration — the VP of engineering at a fashion tech company might not be the best person for fashion advice but would be a great person to talk about software architecture.

Try and find the genius in each advisor and to focus on asking them for advice relevant to their expertise. For example, one of my advisors and mentors is great at building competitive advantages and is, therefore, my go-to-person when I have strategy questions.

Scratch

Don’t reinvent the wheel. Figuring things from scratch takes time, energy and a lot of trial and error. Look at what others have been doing and how you can take advantage of what they have built.

Besides looking at what the direct competition has created, you can also talk to experts in the field who can give you insights on how to build or improve the process. You can also look at similar processes in different industries. One way that you can save time is to use open source codes for your prototype. This will save time and energy both coding and debugging.

Network

Every entrepreneur will tell you how important it is to build your network of investors and professionals within your industry. You also need to build a network that can help you on a project basis — individuals to talk to about creating a press release, financial modeling or your hiring process. This can be really helpful and save you significant resources versus relying on freelance websites to find a suitable person for a one-time assignment.

In the past, there has been so much emphasis on raising capital, but that’s not the only factor an entrepreneur should consider. Increase your chances of success by raising your startup capital in terms of skills, knowledge and expertise.

Failure Is Necessary

As an entrepreneur, you will inevitably experience failure. What you must understand, however, is that failure is good because it saves you time. When you fail, you know what not to do. The key is to identify failure, and stop chasing it. If something is not working within the first month, change course. I lost years chasing ideas that the market told me very early on were wrong. The market will tell you the truth very quickly; it’s us entrepreneurs who fail to admit it. Don’t be afraid of failing. It’s the best way to take corrective actions.

It’ll Be Harder Than You Think

I was always taught that starting a business will take twice as long as you planned, and cost twice as much. After failing miserably with seven consecutive businesses, I proved this theory wrong. It will take four times as long, and cost you four times as much.

Don’t Be a Perfectionist

Time is more valuable than excellence. Early on in your business, you won’t know whether your ideas are really the right ones. There is no better way of knowing if what you have to offer has a place in the market than by putting it out there.

I spent years perfecting a product that ultimately nobody ever bought. I would have saved tons of time and money by launching it when it was less than perfect. This goes for your website and logo too: I used to spend countless hours and dollars getting my logo just right — from the color to the font. But a logo doesn’t make the company. See if your business succeeds first, then spend time on your branding.

Keep Trying

It took me 12 years and eight different companies to finally find the right idea. If I had given up after the first, second or third idea, I wouldn’t have made it to where I am now. Make sure you’re in a position in life where it’s OK for you to fail — a lot.

Don’t Get Emotional

When running a business, feelings don’t let you see with clarity; they get in the way of the truth. Emotions can cloud your vision when making important decisions, and you won’t want to hear anyone say anything negative about your business. This immediately skews your perspective and causes you to not think objectively. It makes you deaf to key information, which will drain you of time and money. Trust your gut, not your feelings.

Don’t Ask Friends for Advice

Listen to people who have entrepreneurial experience. Don’t consult with your mom or your friend if they have never run a business. They’ll tell you what you want to hear because they care about you, and what you want to hear is never good advice when starting a business. You need to hear the cold truth about your idea and your strategy.

Sell to Those Who Can Afford to Buy

One of my mentors used to use the analogy, “Why do robbers rob banks?” Well, that’s where the money is. When selecting your customer, go after the ones with money. Don’t sell to consumers who will nickel-and-dime you. Business is hard enough, so remove as many barriers as possible and sell to customers who can afford to buy. It will increase your chances of success.

Break the Rules

Don’t be afraid to break the rules. When you’re small, you may think you’re the center of attention and that everyone is watching you, but the fact is that nobody is, and nobody cares. Sometimes, bending the rules is necessary to save time to prove your concept or quickly get ahead. Once you do, millions of people will start taking notice.

1. Don’t Quit Your Day Job

You might think you only need 40 hours a week to go from ideation to a living, breathing product or service, but it’s simply not true. Working nights and weekends will help you prove to both yourself and your loved ones that you want it badly enough.

Keeping your day job not only helps you maintain your lifestyle, but it helps you funnel every last dollar your company earns into growing your product. Keeping your day job means you can pay yourself first, and move financial resources into your project.

I launched BuySellAds in February 2008, and I didn’t leave my job at HubSpot until that December. Despite early success, initial traction and a $1 million run rate in sales within our first four months, I stuck with my current job until I could pay myself and afford to hire staff.

2. Test the Market

Before I spent a single minute building the BuySellAds platform, I designed a landing page that pitched the idea of an advertising marketplace. It included a basic lead form and asked interested parties to register for more information and details once we launched the company.

Once the landing page was live, I purchased a series of ads on websites for my target audience. The conversion rate from clicks to email signups was quite good (around 7% if I recall, which is almost unheard of on today’s conversion-hungry internet). I would then research the email accounts of those who signed up, look up domain names by searching WHOIS records, and determine if the lead was legitimate or just someone kicking tires.

A one-page product teaser validated my idea. It gave me enough confidence to take the next step. Using this method, I was able to uncover market potential a full year before I launched the first version of our platform.

3. Plan to Wear a Lot of Hats in the Beginning

Early on, you’ll have delusions of grandeur. You’ll fantasize about large offices and a huge workforce working on your project. It’s normal, and it’s healthy. Visualizing what the future looks like is a fantastic way to meditate, but in the beginning, you need to fight the desire to burn cash. Keep your team small until you can’t physically survive without expanding your team.

A second or third developer may be nice, but the more people you add to your company, the more your role will shift from “getting things done” mode to management mode. If you grow too fast, you’ll be spending more money on embedding managers into your project, and less money on tackling your core problems.

It’s a hard urge to fight; I would know.

4. Prioritize Hires

The moment you find a salesperson who’s also proficient in Photoshop, cascading style sheets and PHP, hire that person immediately. Well-rounded employees with a vast array of skills are worth their weight in gold. Early on, it’s often better to hire a master of some than a master of one, especially in the moments directly succeeding your market testing.

Of course as you grow, specialization will become more valuable than versatility. But in the early days, you need people to roll up their sleeves and push stuff across the finish line.

5. Find People on the Rise

Find people who are close to outperforming their current roles at other companies. Hiring those who are almost ready to take the next step in their careers is a fantastic way to stretch your dollar. If you can polish this skill, you’ll have a small team that is seriously outperforming its compensation.

The key here, however, is to give them the time, attention and respect they need to help them upgrade their skills. Of course, paying them fairly is tantamount to maintaining a positive relationship. Once you can agree on fair compensation, stand back and watch them blossom.

6. Don’t Take ‘No’ for an Answer

You may often find yourself saying “no” to spending money, but when it comes to closing your early deals, never take no for an answer. Do everything you can to make it work and still come in under budget.

By treating every paying customer as your first, last and only, you’ll be setting a precedent for perfection across your entire team. Without customers, you’ll never be successful. Convince early prospects that you’re worth taking a chance on, and help them see that they’re betting on a sure thing.

7. Try Lots of Ideas, but Kill Underwhelming Ones Quickly

You may want to say “yes” to a few bold ideas, but quickly decide whether or not they’re working out. There’s also nothing wrong with canning ideas for the future and acting on them once they start eating at your brain. Just make sure you’re collecting enough valuable data to make educated decisions. If the numbers aren’t adding up, kill an idea.

The key is to realize that doing anything by committee will ultimately drag out the completion process. As a startup without venture capital funding, that means burning through your financial reserves. Make a decision on projects quickly. Get your project wrapped up, or move on to the next one. Iterate where it makes sense.

There were two main reasons my company decided to fund ourselves independently. The first — and most obvious — reason was ownership. Every founder starts with 100 percent undiluted ownership. Outside funding chips away at both ownership and emotional investment as you trade equity for investment; sometimes young entrepreneurs give up too much too fast. I know plenty of CEOs who sold out too early.

The second reason we wanted to support ourselves was the freedom it allows, though it is a double-edged sword. Having the freedom to determine our direction enabled us to exit certain profitable industries when it became apparent consumers were no longer receiving value. Without investors, it was easier to shift directions. In our case, closing one door opened a new one that may have remained closed to us had we been restricted by outside agreements and opinions.

However, there are trade-offs. When it’s all on you, the pressure is enormous. To succeed, you have to get creative about cash flow. Our solution was to work with our bank and leverage our receivables. That way, we could borrow based on a percentage at any time. Depending on the contract, our customers can pay us anytime from net 30 to net 90 days. The ability to borrow against our receivables has helped take the pressure off the day-to-day cash flow.

Getting Creative: The Secret Behind Successful Self-Funding

Constant creativity is necessary to navigate the tight budget of self-funding. I take every company expense — from office space to the coffee we have in the break room — as a challenge to secure amazing deals and promote future growth.

Here are three ways to creatively and effectively grow your startup without relying on money from outside investors:

1. Don’t ask friends and family

Betting your own money and losing it to strangers is difficult, but losing your friends’ or family’s money is an even bigger pressure you don’t need. Instead, be relentless about making only deals that make economic sense. When using your own money, you simply don’t have the luxury of taking deals that aren’t profitable to some degree.

When our building owner wanted a percentage each month that we couldn’t afford, I applied a little creativity to the negotiation. We came away with a lease that enables us to pay less in the early years and make increased payments toward the end. It frees up money today based on the projection that we’ll be making more money in five years.

2. Get inventive to get what you need

Operate under the principle that it never hurts to ask. When funding your future is all up to you, the need for habitual frugality makes you come up with creative questions to get what you need.

We’ve asked for different things — all of which enabled us to free up money. For example, I went to our customers early on and asked them to pay sooner in exchange for discounts. We also asked our media sources for larger credit lines so we could do more in the short term. We even vet our partners and credit the same way a bank does. If it weren’t my own money on the line, I’m not sure I would have done the same.

3. Be a good neighbor

Lift your head up and think beyond the day-to-day. It’s not always easy to find the time, but getting engaged in your community not only helps you network, it also pays dividends.

Our company is a member of the Downtown San Diego Partnership, and our involvement is about the bigger picture, not our own company. Being part of the organization, which is working to revitalize downtown San Diego, is a long-term investment for us. As the organization succeeds, our business benefits from the greater community building a favorable environment for startups.

Electing to go without outside investors isn’t right for every startup, but I recommend giving it some serious thought. It keeps you focused on the bottom line around the clock — and that’s never a bad thing.