How hard is it to raise venture capital? | SaaStr (2024)

FAQs

How hard is it to raise venture capital? ›

It's increasingly difficult for early-stage startups to receive venture capital, but that doesn't mean it's impossible—it just means you'll need to be more strategic and targeted. It also means you might need to rely on debt financing for a time.

If you have solid traction and a great team, are your chances significantly higher than 0.05% and will you find at least one investor if you keep hustling? This is a case where statistics are misleading. The overall odds of raising venture capital may be 0.05%. And goodness, there are just so, so many start-ups today.

Jobs in Venture Capital are notoriously hard to land. They don't come by often, and they are seldom advertised—except in large VC firms, mainly for entry-level positions. Aspiring VCs often don't understand Venture Capital well enough to apply at the right type of firm or one that is interested in their skillset.

Instead, try to show how your motivation aligns with the mission, vision, and values of the VC firm you are applying to, and how it relates to your background, skills, and experience. Many candidates we interview try to explain a transition into venture capital with a logical career progression.

Securing VC funding? It's tough, traction and timing are key.

Numerous factors contribute to the difficulty of raising growth capital, ranging from market conditions, changing investor preferences, the competitive position of your business proposition, and networking capabilities.

Truly tiny. There are only a few hundred VC firms, and each may only need 1-3 more junior investors. That means a handful of positions, really. There just aren't that many VC firms, and they don't have that many employees.

Interviewers will want to test your knowledge of the Venture Capital firm, including its portfolio, and decision-making processes. Be prepared to discuss the firm's current investments, your investment preferences, and how you would approach due diligence.

Why do people want to work in VC? ›

With so much potential to grow, job opportunities in a VC firm have benefits that include high paid salary, intellectual stimulation, and professional growth.

To prepare for a venture capital case study interview, familiarize yourself with the industry and its trends, practice analyzing case studies, and develop a structured approach to problem-solving and decision-making.

So the proper metric could be to have 12–18 months to execute your plan; adding 6 months to it for fundraising means you should always raise for an 18–24 months runway.

Stories of startups that raised VC funding seem to dominate financial headlines, but in reality only about five in 10,000 startup businesses receive venture funding — less than 0.05%, according to Fundera.

The capital in VC comes from affluent individuals, pension funds, endowments, insurance companies, and other entities that are willing to take higher risks for potentially higher rewards. This form of financing is distinct from traditional bank loans or public markets, focusing instead on long-term growth potential.

Venture debt is typically made available alongside an equity raise or within a few months of a round closing. It can be made available between rounds, but companies should have around 9-12 months of cash runway.