Raising money from investors is an impressive accomplishment. Not only can the effort provide working capital for a growing business, it can enhance the founding entrepreneur's knowledge of securities laws, accounting, contract negotiations and so much more. Actually, with the right attitude and information, the fundraising process can be a lot of fun!
Entrepreneurs often ask, “Why does it take so long to raise money from investors?" Actually, a better question to ask might be, “What can I do to speed the process without turning off prospective investors?"
Before agreeing to invest in a company, most angel investors and certainly venture capital funds will want to become highly conversant in your business and the demand for your products or services. This exchange of market information takes time. Investors will also conduct some form of “due diligence” which is VC-speak for the tire kicking research and investigative process prior to writing checks to entrepreneurs. As part of this due diligence process, investors will study the company’s corporate organization, business agreements, competitive positioning, customer satisfaction and other factors that might affect the potential risk of the proposed investment.