The general guidance is if you have less than 9 months of cash, you should focus on fundraising. The caveat to this is that if you need traction before an investor will invest in you, your time is best spent on traction. We will start focusing on fundraising in earnest 5 weeks prior to your Demo Day -- so if you can wait until then, we’ll be focusing on fundraising then.
Let me explain. If you have a strong team or sitting on an unfair advantage (strong IP, tech, other advantage), you can start to raise in advance of traction. A strong team means your co-founding team graduating from one of the top institutions in the US, worked for one of the premier tech companies prior to starting the company, or had an exit of $100m or more in a prior startup.
If not, you can also focus on fundraising before traction if you have access to investors who know your space or team. That is, investors who do not need to see traction to know the company will be valuable. These are qualified angels -- e.g. anyone who is a Vice President or above at a Fortune 500 company and knows your space / feels the pain point you are addressing, an investor who’s made money in the space you are operating in, a former successful founder in the space you are operating in, someone connected to your teams’ backgrounds, etc.
If / as you are focusing on traction / executing your business / meeting mentors / doing customer discovery, you should always ask people if they want to invest in you. The issue with fundraising is that it can be a time suck. And so, you want to focus on meetings where even if they don’t invest, it’s not a waste of time.
If you don’t have any of the above, it’s best to maniacally focus on traction and then start fundraising in earnest 5 weeks before Demo Day. When we start fundraising, your time will be completely consumed by this. And so we want you to make the best case re: traction etc before hand. And you should use your time now to work on the business if you can afford to so you have the most efficient raise.