Most fundraising advice you read online is from 2019-2021. The free money era. When VCs were throwing cash at anything that moved.
That world doesn't exist anymore. But founders are still following playbooks written for it.
And they're confused when those tactics don't work.
What changed
2021: VCs had too much money and too few good companies. They competed to invest. Valuations went crazy. Terms were founder-friendly.
2024: VCs have normal money and way more companies. Founders compete for investment. Valuations are rational. Terms are investor-friendly again.
It's a completely different market. But the advice you're reading was written for the old one.
The outdated playbook
Here's what the old advice said:
Focus on growth at all costs
Raise at high valuations (multiple term sheets = leverage)
Revenue doesn't matter early
Raise "runway" to give yourself 18-24 months
VCs will compete to invest in hot deals
That worked when money was free. It doesn't work now.
What actually works in 2024
Current reality:
Profitability or clear path to it matters
Raising at reasonable valuations protects you
Revenue matters from day one
Raise based on milestones, not arbitrary runway
VCs have leverage, not founders (unless you're exceptional)
The power dynamic flipped. And if you're following 2021 playbooks, you're operating on incorrect assumptions.
The "hot deal" myth
Old advice: Create FOMO. Get multiple VCs interested. Play them against each other.
Current reality: Unless you're already crushing it (real revenue, real growth), you don't have leverage. VCs will pass and you'll have wasted weeks trying to manufacture competition that doesn't exist.
I've watched founders try the FOMO strategy. It works for maybe 1% of companies. The other 99% just annoy investors and waste time.
The valuation trap
Old advice: Raise at the highest valuation possible. Show strength.
Current reality: High valuations early make later rounds harder. If you raise at $20M valuation pre-product and don't 10x by Series A, you're dead. You can't raise down without massive dilution.
Better to raise at a reasonable valuation and actually hit milestones that justify a step up.
The founders who raised at inflated valuations in 2021-2022 are now doing down rounds or shutting down because they can't justify the next round.
What VCs actually want now
2021: Growth potential, big vision, interesting founder
2024: Proof of traction, clear unit economics, capital efficiency
You can't pitch pure potential anymore. You need numbers. Real numbers.
"We'll figure out monetization later" doesn't work. "We have $50K MRR growing 15% monthly with good retention" works.
The fundraising timeline
Old advice: Fundraising takes 2-3 months
Current reality: Fundraising takes 3-6 months, maybe longer. VCs are more cautious. They take longer to diligence. They pass more often.
Plan accordingly. Don't wait until you have 3 months of runway to start fundraising. You'll run out before you close.
The capital efficiency test
VCs now ask: "How much could you accomplish with $X?"
If you say "We need $2M for 18 months runway," they hear: "We're going to burn through this with no plan."
Better answer: "We can hit $X revenue with $Y capital, which gives us Z months to Series A milestones."
Show you understand capital efficiency. Because the free money era is over.
What bootstrapped/profitable means now
2021: "We're bootstrapped" = "We couldn't raise"
2024: "We're profitable" = "We're disciplined and don't need your money as badly"
Being profitable or close to it is actually a positive signal now. It shows you can build efficiently.
VCs are tired of funding companies that burn millions with no path to profitability.
The alternative path
Here's what more founders should consider:
Don't raise immediately. Build to profitability if possible. Raise from a position of strength.
Or raise smaller amounts ($500K instead of $2M). Hit milestones. Raise again.
The "raise big, grow fast, figure out business model later" playbook doesn't work anymore.
Why the old advice persists
The content you're reading was written by:
VCs explaining their 2021 investments (survivorship bias)
Founders who raised in the boom (outdated context)
Media covering unicorn stories (not representative)
None of them updated their advice for the current market.
So you're reading tactics that worked 3 years ago and wondering why they don't work now.
What I learned applying to YC
We made YC hackathon finals. Didn't get into the batch.
And reading YC advice from 2019-2021, you'd think just having users and revenue would be enough.
It's not. The bar is way higher now. Everyone has users and revenue. You need to show why you'll be exceptional.
The acceptance rate dropped. The competition increased. The playbook changed.
What you should do instead
If you're fundraising in 2024-2025:
1. Focus on metrics. Revenue, growth rate, retention. Not vanity metrics.
2. Show capital efficiency. How much can you do with how little?
3. Have realistic valuations. Don't price yourself out of future rounds.
4. Consider alternatives. Revenue-based financing, smaller rounds, profitability.
5. Don't follow 2021 playbooks. That era is dead.
The market changed. Your strategy should change too.
— Arjun