Raising money can be one of the biggest milestones in a startup’s journey. But most founders don’t realize that successful fundraising isn’t one single strategy—it’s a series of phases that require different tactics at each stage.
In a recent Netcapital webinar, Jose Ruiz, Founder and CEO of Space Funding, shared observations and strategies seen across 350+ companies that have collectively raised over $85 million. (Note: Past performance does not guarantee future results.)
The key insight: Strategies often evolve; the tactics used for an initial $100K raise may differ from those required for larger funding targets.
Instead, founders should think about fundraising in three phases.
The following breakdown represents a hypothetical path observed in many fundraising journeys, though individual results and timelines vary significantly:
|
Phase |
Goal |
Core Strategy |
|
Phase 1 |
$0 → $100K |
Personal network + micro angels |
|
Phase 2 |
$100K → $500K+ |
Turn your raise into a marketing engine |
|
Phase 3 |
$500K → $1M+ |
Scale what works using data |
Each phase builds on the previous one.
The first $100K can be the hardest money to raise.
Investors want to see early traction. If people who know you best aren’t investing, strangers are less likely to take the first step.
Your earliest investors typically come from what Jose calls “Circle Zero.”
This includes:
Founders often utilize email outreach and LinkedIn connection requests to introduce their company. Compliance Note: If your offering is live, all communications must comply with SEC Rule 204. Ensure any public communication includes the required legal legends and direct potential investors to your official offering page.
Investors follow momentum.
If a potential investor visits your offering page and sees $0 raised, they might hesitate. But if they see $75K or $100K already committed, the psychology changes.
Early traction can signal:
Establishing early traction can serve as an important signal and may assist in building confidence for potential future participants.
Micro angels are individuals who typically invest $250 to $2,500, though some may invest $5,000 or more.
These investors are often motivated by:
They are an important bridge between your personal network and larger investors.
If you don’t already have an investor network, you can begin building one in places like:
The goal is not to immediately pitch your raise. Instead, focus on building credibility and relationships first.
Two effective methods are:
Email outreach
Send short, personalized messages introducing your company and asking if they are open to learning more.
LinkedIn connection requests
Include a brief personalized note explaining why you thought they might be interested.
Once your campaign reaches about $100,000, something important changes.
You now have:
This is where founders can begin scaling their raise like a marketing campaign.
Before scaling fundraising, founders should identify their Ideal Investor Profile (IIP).
This is similar to identifying your Ideal Customer Profile (ICP).
Ask questions like:
Examples include:
Understanding this profile helps determine where to find investors and how to reach them.
Once you know your ideal investor profile, the next step is identifying the channels where they spend time.
Common fundraising channels include:
Different industries perform better on different platforms.
For example:
An investor funnel guides potential investors from initial awareness to an investment decision.
It typically includes steps like learning about the company, joining an email list, attending a webinar, and eventually investing.
A typical investor funnel may include:
The goal is to capture investor data and guide them through the decision process.
Once a campaign reaches roughly $500K, founders often have more information about which marketing channels, messaging, and investor audiences are generating the most engagement.
At this point, founders have valuable data about:
This data gives founders additional insight into which outreach strategies and investor audiences are responding to the campaign.
Founders should track several key performance indicators (KPIs):
Many successful campaigns spend 20%-30% of the capital they raise on marketing and investor acquisition.
For example:
If you're planning your capital raise, remember these principles:
1. Start with your community.
Your earliest investors should come from people who already trust you.
2. Treat fundraising like a marketing campaign.
Successful raises rely on data, funnels, and targeted outreach.
3. Use campaign data to guide your strategy.
As your campaign progresses, performance data can help identify which channels and messages are generating the most investor engagement.
Fundraising timelines vary. While some campaigns may take 18 months or longer, there is no set timeframe or guarantee of reaching a funding goal. Early traction usually builds slowly before accelerating once momentum develops. Please note, there is no guarantee that you will raise $1 million.
A common benchmark is 20-30% of the capital raised, though results vary depending on the campaign strategy.
Not necessarily. While personal networks help early traction, founders can expand their investor base through communities, outreach, and targeted marketing campaigns.
Many founders understand the fundraising phases—starting with their network, building momentum, and scaling their outreach—but execution is where many founders struggle.
Running a successful equity crowdfunding campaign requires:
That’s where the right platform can make a significant difference.
Netcapital provides a platform and infrastructure to help founders manage the technical and regulatory aspects of a raise.
Many crowdfunding platforms operate primarily as self-service marketplaces, leaving founders to figure out investor outreach and campaign strategy on their own.
Netcapital takes a more white-glove approach.
Founders working with Netcapital receive guidance on key aspects of a raise, including:
This type of support can be especially valuable for first-time founders navigating the fundraising process.
The cost of running a crowdfunding campaign varies widely across platforms.
Many founders are surprised to learn that fees and marketing costs can significantly impact how much capital their company ultimately receives.
Netcapital's fee structure is designed to be competitive, which can help founders retain a larger portion of the capital they raise.
For startups raising capital, this difference can translate into more capital available for product development, hiring, and growth.
With the right support and infrastructure in place, founders can focus on telling their story, building investor relationships, and growing their company.
[This post is for educational purposes only and does not constitute legal, financial, or investment advice. Success in fundraising is not guaranteed.Equity crowdfunding is speculative and involves a high degree of risk. Most startups fail, and investors should only invest what they can afford to lose.]