One mistake commonly made by entrepreneurs actively fundraising is to oversell their current sales or partnership pipeline.  By advertising that you’re about to close a big deal before anything is signed, you set yourself up for failure.  Investors are necessarily skeptical of whatever they hear, so they’ll probably insist that you close the deal before they fund you.  This puts you in a tough spot, because you might need their money to stay alive and close the deal.  It also damages your credibility if you the deal falls through.  It’s not worth the risk, as too many things can go wrong

It’s a much safer bet to wait until you’ve closed the deal before advertising it to anyone.  The benefit of doing it this way is that, with the purchase order in hand, raising money should be easier and your valuation will go up significantly.

Matt Sand

Author Matt Sand

Passionate about making a difference through innovation and entrepreneurship.

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