How to Master the Fundraising Journey: A Realistic Playbook for Founders
Fundraising is often described as one of the most daunting yet transformative experiences for startup founders. While investors navigate investments regularly, founders may only face fundraising a handful of times in their careers every round comes with critical uncertainties and high stakes: getting it right can shape the trajectory of your business for years.
What follows is a practical guide covering the four essential phases of the fundraising process, distilled from years of hands-on experience supporting startups through their financing journeys.
Step 1: Preparation
Before considering that next fundraise, a founder’s first mission should be to understand both why and when to raise capital. Too often, rounds are initiated reactively when cash gets low instead of strategically, based on growth opportunities and value creation.
For many tech startups, one major milestone is achieving product-market fit: evidence that the product fills a need, users find value, and traction is strong and increasing. But hard metrics alone aren’t enough. Your story—how your offering links to larger trends and why you’re uniquely positioned to scale should be front and center in all materials.
Founders should invest serious time into foundational content:
A brief summary of the business and standout achievements
A concise teaser deck to generate interest over email
A deeper principal deck for investor meetings (well-structured, not overloaded)
Financial projections showing where fresh funding can take you
Optionally, a metrics deck or “data room” in case diligence gets deeper
Building these assets also means hardening your pitch: get input from peers and savvy investors before going “live.” Constructive feedback not only improves your narrative, but can spark warm introductions to valuable funds.
The timeline itself matters. Ideally, start planning a round 12 months before capital is desperately needed. This allows you to time outreach, milestones, and relationship-building while maintaining leverage. Eight months of runway is a healthy minimum to show confidence and avoid desperation.
Step 2: Outreach
The real work begins with mapping out the investor universe. Don’t just list any funds—identify those that have both the capital and appetite to lead your specific round. Target 50-60 relevant funds, focusing on partners whose backgrounds align with your sector.
The warmest introductions often come via other founders already in their portfolio. Never underestimate the value of a robust network in breaking through noise and building investor excitement. Associates and principals at a fund can also be valuable first contacts, but always understand how decisions actually get made, and work towards engaging partners who lead deals.
Early, informal “coffee meetings” can be effective months before fundraising—but reserve them for top-priority investors. As you demonstrate progress, maintain periodic updates and continue strengthening these relationships.
Step 3: Managing the Process
Coordination is everything. Batch your first investor meetings into a short, two- to three-week window. This keeps funds aligned, prevents one group getting ahead in diligence, and helps build healthy competition.
Always ask investors:
What diligence steps will be required?
What actions follow this meeting?
When will these next steps occur?
Which aspects of your business resonate most?
Document this feedback and track every investor’s progress—think like a project manager. Rather than generic follow-ups, compose updates that provide real business insights or advancements since your last touchpoint. This keeps you top of mind while proving momentum.
Expect plenty of rejection - success means ultimately getting interest from just a small fraction of your target list. Don’t let late rejections derail your focus; use them as learning. Find trusted advisors, colleagues, or previous investors to support you through the ups and downs.
Step 4: Closing the Round
Getting to the closing phase means you’ve built real relationships and piqued genuine interest. At this stage, partners in funds may be advocating for your deal internally. Treat these individuals as collaborators—align on how best to present your story to their partnership and clarify the terms and timeline for an offer.
When term sheets arrive, remember: you’re on a clock. Typical decision windows are short. Resist the temptation to disclose competing offers unless strategically necessary. Consider every aspect of the deal—valuation, board structure, stock options, and legal terms—with both confidence and caution. Leverage your legal advisors to clarify the impact of each term.
After signing, realize fundraising isn’t finished until capital hits your account—expect final diligence steps and legal paperwork. As you close, focus again on building momentum within your team and preparing for the next stage of company growth.
Final Thoughts
Every startup’s fundraising journey is unique. Preparation and process are key to managing uncertainties and maximizing outcomes. If there’s one essential lesson, it’s that methodical planning now pays dividends later: Failing to prepare is preparing to fail. Use fundraising as a moment to sharpen your narrative, build new alliances, and propel your vision into its next exciting chapter.
If you’re seeking a partner committed to making the fundraising process as transparent and founder-friendly as possible, Malpani Ventures strives to set the standard in open communication and collaborative support throughout your journey.
Founder: Dr. Malpani, you’re a successful IVF specialist. But angel investing is a totally different field! How do your medical skills help you when evaluating startups?
Dr. Malpani: Actually, medicine and investing are surprisingly similar. In both fields, you’re trying to diagnose problems and design effective treatments. When I meet a founder, I approach them the same way I approach a patient — with curiosity, empathy, and structured critical thinking.
1. Diagnosis Before Prescription
Founder: What do you mean by that?
Dr. Malpani: In medicine, it’s malpractice to prescribe before diagnosing. Unfortunately, many investors do exactly that — they throw money at a “hot” idea before understanding the underlying disease in the business.
I start by asking questions:
Like a good doctor, I differentiate between root causes and presenting complaints. Founders often describe symptoms — “our CAC is high” or “users aren’t sticking.” The real diagnosis might be something deeper — maybe poor product-market fit, unclear positioning, or lack of customer trust.
2. Data, Not Drama
Founder: So you rely on evidence, not enthusiasm?
Dr. Malpani: Exactly. In the clinic, a confident patient story doesn’t replace a lab test. Likewise, a flashy pitch deck doesn’t replace customer validation. I look for clinical evidence in startups — user data, retention numbers, testimonials, repeat usage. I want to see proof that the “treatment” (the product) is working in the real world.
Medicine trains you to respect data but also interpret it intelligently. Founders can drown in vanity metrics. I prefer actionable data — like what your users are doing, not what your investors think.
3. Ethics and Empathy Matter
Founder: And how does empathy come in? Investors aren’t known for being soft.
Dr. Malpani: Empathy is a strength, not a weakness. In medicine, I must earn my patient’s trust before I can help them. In investing, founders are the patients — they’re often anxious, under pressure, and uncertain. A good investor doesn’t scold; he listens.
Many founders come to me bleeding money. My role is to stabilize them — not with another funding infusion, but with clarity. I remind them: “You don’t need more money. You need more paying customers.” Just like I’d tell a patient, “You don’t need more medicines. You need the right lifestyle change.”
4. Treating the Cause, Not the Symptom
Founder: That’s interesting. But what happens when a startup is in crisis — say, revenue’s flat or growth’s stalling?
Dr. Malpani: Then I go into diagnostic mode. I perform a “startup autopsy” — look at customer journey, feedback loops, cash burn. In medicine, we treat causes, not symptoms. If a startup is bleeding cash, funding isn’t a cure — discipline is.
Doctors know that every treatment has side effects. Similarly, every growth hack has trade-offs. Giving discounts might increase sales but erode brand trust. A doctor-investor thinks systemically — how one organ (marketing) affects another (cash flow).
5. The Value of Second Opinions
Founder: Do you ever change your mind about a startup after investing?
Dr. Malpani: Of course. In medicine, we constantly review cases, take second opinions, and update our understanding. Ego kills patients — and startups. I value founders who are coachable and evidence-driven.
When something’s not working, I don’t shame them; I help them pivot intelligently. A failed experiment isn’t failure — it’s feedback. That’s how science — and startups — evolve.
6. Bootstrapping is Preventive Medicine
Founder: You talk a lot about bootstrapping. How do you connect that to medicine?
Dr. Malpani: Bootstrapping is preventive medicine. It’s like telling a patient to eat right and exercise rather than rely on surgery later. Founders who raise money too early become dependent — like patients hooked on steroids.
When you bootstrap, you stay lean, alert, and self-reliant. You learn to live within your means, listen to your customers, and iterate fast. That’s what creates resilient startups. The goal isn’t to raise the most money — it’s to stay alive long enough to create value.
7. Investing as Healing
Founder: That’s a very different lens. So would you say investing is like healing?
Dr. Malpani: Absolutely. Medicine is about restoring health; investing is about nurturing potential. Both require patience, not just prescriptions. When I invest, I’m not funding a spreadsheet — I’m backing a founder’s journey toward sustainable growth.
And like any good doctor, I don’t want repeat customers. I want founders who eventually don’t need me — who can stand on their own feet, with a healthy, cash-positive business that puts the customer first.
8. The Final Check-up
Founder: If you had to give one piece of advice to founders, what would it be?
Dr. Malpani: Think like a doctor — be curious, compassionate, and committed to evidence-based action. Diagnose your problems before you treat them. Listen to your customers — they’ll tell you what’s wrong if you stop interrupting them.
And remember — the goal isn’t to get a “funding injection,” but to build a company that can heal itself through customer love, discipline, and frugality.
Dr. Malpani: Want to learn more about bootstrapping and creating sustainable businesses? Explore more insights and resources for entrepreneurs at www.malpaniventures.com. Let’s build businesses that put customers first!
Good investor updates do three things: keep everyone aligned, improve decisions, and unlock help when you need it. The goal isn’t a pretty memo; it’s faster learning and more leverage for the company.
You see the business clearly. A monthly forcing function reduces fuzzy thinking. Writing makes tradeoffs explicit.
You compound help. Clear asks turn passive backers into a bench of recruiters, sellers, and advisors.
You de-risk future fundraising. Consistent updates build trust and show discipline; follow-on checks become easier.
Pre-PMF (idea → signal): Emphasise on learnings- what you tested, what you killed, and what you’re doubling down on.
Early revenue (repeatability): Emphasise conversion and payback- win rate, sales cycle, CAC payback
Post-PMF (scale): Emphasise cohorts and unit economics- net dollar retention, gross margin, operating cadence, hiring quality.
Share the core metrics, then add a short “what changed and why.”
This gives investors context, prevents overreacting to noise, and helps them give targeted feedback.
Early stage (pre-product/market fit): monthly.
Post-PMF with stable revenue: quarterly, plus ad-hoc notes for major milestones or surprises.
Consistency builds trust and gives you a regular “think clearly about the business” checkpoint.
Use the same sections and definitions each update (e.g., MRR vs. ARR, booked vs. billed revenue).
A stable format lets trends emerge and reduces back-and-forth.
Investors don’t expect a straight line. They do expect early warning and a plan.
Share the issue, root cause, options considered, and your chosen next step.
Most investor help is unlocked by clear, narrow requests.
Think intros (“2 warm intros to heads of radiology at tier-1 hospitals”), expertise (“30 min with someone who scaled inside sales from 3→15 reps”), or hiring (“backend lead with MedTech experience”).
If someone helps, report back in the next update. It reinforces the behaviour you want and keeps people engaged.
A great investor update isn’t long- it’s useful. If you match your cadence to stage, pair numbers with clear narrative, and end with concrete asks, you’ll get sharper feedback, faster help, and stronger trust.
When the founder’s valuation expectations and the investor’s offer don’t align, you don’t have to walk away. You can use deal structures that defer the valuation call or share future upside based on performance- so neither side loses face.
The Core Problem
Instead of stalemating, design hybrid terms that connect price to proof:
1) Convertible Instruments (Defer the Valuation Decision)
Instruments: Convertible Note / SAFE / CCD / CCPS
Structure: Investor puts in money today as debt or preference shares that convert into equity at the next priced round.
Underlying principle: Price later, fund now. You avoid a premature pricing fight by using future market discovery.
Example: “We’ll invest ₹2 crore now, converting at the next round at a 20% discount to that round’s price, or at a valuation cap of ₹15 crore- whichever is better for the investor.”
Best for: Early-stage deals or when comparables are unclear.
2) Earn-Out / Performance-Linked Valuation
Structure: Lower base valuation today, with a contractual “top-up” if milestones are hit (revenue, EBITDA, users).
Underlying principle: Prove it and get paid. Founders unlock higher effective valuation once they deliver results.
Example: Base valuation ₹10 crore now. If monthly revenue hits the agreed target within 18 months, founders receive extra equity or cash to reflect a ₹15 crore effective valuation.
Best for: When the founder is confident, but the investor wants proof through traction.
3) Ratchet Mechanism (Valuation Adjustment Clause)
Structure: After the round, ownership shifts if performance diverges from plan. Beat targets and the founder’s stake ratchets up; miss targets and the investor’s stake ratchets up.
Underlying principle: Align price with outcomes, not forecasts.
Example: Founders 70%, investor 30% at close.
Best for: Growth-stage or buyout-style deals with clear KPIs.
4) Warrants or Options
Structure: Investor invests at the lower valuation today but receives warrants to buy additional shares later at a preset price if milestones are met.
Underlying principle: Contingent upside. Extra equity only triggers when the business proves worth.
Example: Investor invests at a ₹10 crore valuation and gets warrants exercisable at the same price if the startup crosses ₹5 crore ARR.
Best for: Moderate valuation gaps with well-defined milestones.
5) Tranching the Investment
Structure: A committed amount is released in milestone-based tranches, each tranche possibly at a higher valuation.
Underlying principle: Pay as you validate. Price steps up with reduced risk.
Example:
Best for: When the main concern is scaling risk or market validation.
6) Hybrid Equity + Royalty / Revenue Share
Structure: Investor comes in at a conservative valuation and receives a small royalty on revenue (e.g., 2–5%) until a pre-agreed return multiple is met.
Underlying principle: Return-first protection. Investor de-risks with cash yields while founders retain upside after the cap.
Example: Investor pays ₹1 crore at a ₹10 crore valuation plus 2% of gross revenue until 2x is returned.
Best for: Cash-generating or D2C businesses with steady revenues.
7) Preference Shares with Liquidation Preferences
Structure: Investor moves closer to the founder’s desired valuation in exchange for superior downside protection (1x–2x liquidation preference).
Underlying principle: Higher headline price, stronger backstop.
Example: “Value at ₹20 crore, but if the company exits below ₹40 crore, we receive 2x our investment before common shareholders.”
Best for: When the gap is about perceived risk rather than fundamentals.
8) Revenue Milestone Buy-Back or Step-Up Equity
Structure: Contractual two-way adjustment. If targets are missed, founders buy back a portion of investor shares at a premium; if targets are exceeded, investor equity steps up.
Underlying principle: Self-correcting stakes. Equity rebalances to the side that was “right” about performance.
Example: If revenue misses target, founders buy back 5% at a pre-agreed premium. If revenue exceeds plan, investor’s stake increases by 5%.
Best for: Mid-stage deals with predictable metrics.
9) Phantom Equity / Bonus Pool for Founders
Structure: If the investor insists on a lower current valuation, founders negotiate a cash-settled bonus or phantom equity tied to future exit value.
Underlying principle: Preserve founder upside without altering cap table today.
Example: “Accept the lower valuation now, but if exit exceeds ₹100 crore, founders receive an additional 10% payout.”
Best for: When investors want governance/control comfort while founders protect long-run economics.
10) Dual-Tranche Valuation
Structure: Agree on two valuations- one lower “base” now and a higher “true-up” later if milestones are hit.
Underlying principle: Deferred repricing. Today’s cheque lands at investor comfort; a later adjustment recognizes delivered performance.
Example: Investor invests ₹2 crore at a ₹10 crore base valuation. If targets are met, a second tranche or adjustment retroactively prices the round at ₹15 crore.
Best for: Negotiations stuck on perception rather than risk appetite.
To Conclude
These structures help both sides meet in the middle. Founders keep aspirational valuations when they deliver results; investors get real protection if things go sideways.
Founder Tip
We recently had the privilege of attending the Bharat Agrinnovation Manthan 2025 program held at Sahyadri Farms, Nashik - a flagship initiative by Digital Impact Square, a TCS Foundation effort aimed at fostering innovation in Indian agriculture. This immersive three-day event was an exceptional forum that convened top minds including innovators, investors, policymakers, and agri-ecosystem enablers to catalyze transformative change at the intersection of agriculture and technology.
Nestled in the fertile landscapes of Nashik, Sahyadri Farms served as more than just a venue; it embodied the future of Indian agriculture itself. With expansive farm plots, innovation labs, and Digital Impact Square’s agri-tech sandbox, the setting provided a real-world context where disruptive startup solutions could be demoed, tested, and scaled. The event was hosted under the aegis of the Nashik District Administration, Maharashtra State Innovation Society, Maharashtra State Agriculture Department, and the Mahastride initiative, reflecting deep government support across policy, innovation, and infrastructural pillars.
Showcasing Groundbreaking Innovation
The innovation expo was a powerhouse of novel agri-tech solutions showcasing India’s vibrant startup ecosystem. The innovation expo showcased a spectrum of startups working on cutting-edge solutions: from autonomous tractors and robotic pruning systems to IoT-enabled smart storages that reduce post-harvest losses. Startups also displayed circular economy models converting agri-waste into biomass energy and value-added products like millet-based snacks and plant-based beverages.
Among other exciting startups were:
- Agrodroid: Modular, farmer-rentable robotic systems automating labor-intensive tasks like cotton picking and soil management, democratizing access to advanced farm automation.
- FlyLab Solutions: Precision drone spraying combined with a community-based model creating local “DronePreneurs” who serve hundreds of farmers, reducing pesticide use and saving millions of liters of water.
- CSK India Mechanic Company: Tractor-mounted implements designed and tested for Indian soil conditions that improve efficiency and reduce manual toil.
- Modern Village Foundation: A tech platform and Smart Village Centres improving soil health, water conservation, and rural employment in multiple states.
- SuggiVeer Innovations: Climate-resilient harvesting tools that reduce labor and losses while increasing farmer incomes with decentralized solutions for crop and fodder management.
Godaam Innovations: IoT-enabled smart cold storage facilities that monitor and control temperature & humidity, drastically reducing post-harvest spoilage and financial losses for perishable commodities like onions.
Beyond the demonstration, enriching discussions unfolded around overcoming adoption challenges for drone technology among smallholder farmers, enhancing sustainability by cutting chemical use with precision spraying, and utilizing real-time geo-data to improve yields. These conversations underscored the critical blend of technology with farmer-centric design principles.
Engaging dialogue: From Policy to practice
Throughout the event, keynotes and panels brought clarity on navigating regulatory pathways and sustainable business models in AgriTech. The launching of Maharashtra’s new Agri AI Policy 2025-29 was a notable milestone, positioning the state at the forefront of digital agriculture with emphases on AI, IoT, generative AI, robotics, and predictive analytics.
A major theme resonating across sessions was the emphasis on scalable technologies that are inclusive empowering women farmers, farmer producer organizations (FPOs), and marginal cultivators. The event fostered lively exchanges between startups, investors and government officials on market linkages, financing, and infrastructure that collectively can unlock the potential of India’s vast agri-economy.
One could sense a palpable energy focused on building climate-resilient farming through micro-weather predictions, water-saving irrigation tech, and regenerative agriculture practices—reflecting the urgent need to adapt to shifting environmental realities.
What truly set the Bharat Agrinnovation Manthan apart was its on-farm immersion model, placing farmers and real agricultural challenges at the heart of innovation discussions. The event included a farm tour to showcase new technologies under realistic conditions, enabling cross-learning between startups, researchers and the farming community.
Our takeways
Our experience at Bharat Agrinnovation Manthan strengthened our belief in AgriTech’s promise as a pathway to sustainability, efficiency and inclusivity in Indian agriculture. We had a chance to speak to fellow investors and exchange thesis on various domains of this industry. The journey of reshaping India’s agricultural landscape through technology is well underway, and we are excited to be wholehearted participants in this transformative movement.