Innovation
The Early-Stage Founder’s Guide to Fundraising
- Innovation
- Article
- 4 minutes read
Raising venture capital is never easy. But funding volumes remain high for UK-headquartered startups, with UK companies raising $9 billion from investors¹ in the third quarter of 2025 alone. But many early-stage founders see the fundraising process as opaque and ‘all or nothing’. Our collection of fundraising resources aims to demystify the funding process for early-stage companies. Let’s dive in.
- Fundraising is an always-on operation for many founders. The work of building relationships with investors, crafting pitches and understanding the funding landscape never really stops.
- Investors are eager to commit to companies that exhibit best-in-class metrics, with seed and Series A round sizes having increased in recent years. But the AI boom risks creating a ‘flight to quality’ with a small number of category leaders attracting large proportions of total VC money.
- Our fundraising pathway gives you resources and insights from HSBC Innovation Banking experts, as well as founders and investors who’ve been in your shoes.
Founders who decide to raise their first round of equity funding are consciously choosing to put their startup’s train on a particular track. Venture capital (VC) firms are seeking a return on their investment. Broadly, VCs are looking for rapid growth, a culture dedicated to speed of innovation, and the determination to build a significant, enduring business that can lead in its category globally.
But there are few ‘warts and all’ guides to raising money. Partly, that’s because every company, and every fundraising process, is different. There are so many variables that affect each funding round, from revenue growth rates to the engineering and commercial talent that founders are able to recruit.
This batch of resources shines a light on the many and varied components of raising equity investment. We’ll discuss the merits of trying to ‘time’ your fundraising process, the metrics investors are looking for from potential portfolio companies, and much more besides. Insights are courtesy of founders, investors and operators who’ve been through early-stage funding rounds.
Finding routes to capital
The allure of venture investment is clear: the expertise of seasoned growth partners for the journey ahead, added credibility with customers, and, of course, the cash that’ll help you attract talent, build exceptional products and plan for business expansion.
All the same, early-stage founders embarking on a fundraising process face a delicate balancing act. Start the process too early, and you risk distracting yourself from scaling the product and commercial functions. Start too late, and a weak cash position might force you to rush a process and communicate an air of desperation – never a good look to an investor.
So how should you approach a fundraise? And what scenarios should you prepare for? Let’s walk through the process.
Gearing up to raise capital
The reality for many young startups is that raising equity funding generates cash runway – essential for hiring, developing new products, and expanding into new sectors or markets. But where to start?
Our pitch deck template
Deciding how you structure your pitch deck is one of the most consequential decisions an early-stage founder will make. Nicole Scola and Glen Waters walk you through some of the secrets to creating a pitch deck in this blog. And, we’ve built you a starter pitch deck based on a set of templates created by some of the largest VCs.
Timing your round: how to maximise leverage through a fundraise
There is no such thing as a perfect funding round. But founders can make life easier by understanding the fund lifecycle. Which VCs are actively deploying capital? How much capital do different firms retain for follow-on investments? And what’s the secret to getting VCs interested in your pitch? Answers to these questions and many more in our article.
Finding – and keeping – product-market fit
Product-market fit (PMF) is perhaps the most elusive goal for a scaling startup. It can be transformative when everything clicks, but like so many things in a fast-growing company, PMF can ebb and flow as markets and trends shift. We discuss the ins and outs of PMF with product leaders and investors.
Tips and tactics to raise the right round for you
The reality for many young startups building products is that raising money might well be existential. But even amid the urgency of a fundraise, careful planning and forethought is critical to achieving a successful outcome.
Raising a seed round: the unfiltered truth
Your first institutional investment round is a point of extreme uncertainty and enormous potential for founders. But what lies beneath the celebratory social media posts from the startups that get over the line? I talk to three founders who provide their candid impressions of seed funding.
Negotiating term sheets: in conversation with Dan Bowyer
We sit down with SuperSeed partner Dan Bowyer to discuss the ins and outs of term sheet negotiations. When should a founder compromise, and when should they stand up for a valuation or a particular clause they really care about? And how does the process differ when raising from a UK investor versus their peers in the States? All this and much more in a lively conversation with Dan.
The data that matters most
Although the investor’s gut instinct does matter in an early-stage deal, funding rounds are an opportunity for you to explain the quantitative rationale for why you’re an exciting prospective investment. The key metrics differ dramatically from company to company and sector to sector, though. Below we detail the views of industry insiders, as well as a starter pitch deck based on an analysis of leading VC deck templates.
Key B2B metrics
HSBC Innovation Banking’s Sydney MacGregor and Ryan Clements discuss the latest data and trends in B2B, unpacking the benchmarks – from revenue, to retention – that matter most to investors in a fundraising context.
Key B2C metrics
John Stewart and Nicole Scola, consumer specialists at HSBC Innovation Banking, review the data points that are most important for B2C businesses raising VC funding. From contribution margin to average order value, learn what consumer investors are looking for here.
What gets seed and Series A investors excited
Founders are eager to raise the right talking points in their investor meetings. But which metrics make investors’ ears prick up? HSBC Innovation Banking’s Alex Threipland spoke with Morgane Zerath of seed specialist Crane Venture Partners and Ewa Kompowska, investor at RTP Global, to understand what early-stage founders can do to make their companies stand out.
There are a million ways to raise a funding round, but the path to a successful close is rarely easy. Read more about the inflection points founders face on their scaling journey: access all Founder Success content from HSBC Innovation Banking here.
Any opinions expressed are merely opinions and not facts. All information in this document is for general informational purposes and not to be construed as professional advice or to create a professional relationship and the information is not intended as a substitute for professional advice. Nothing in this document takes into account your company’s individual circumstances. HSBC Innovation Banking does not make any representations or warranties with respect to the accuracy, applicability, fitness or completeness of this document and the material may not reflect the most current legal or regulatory developments. HSBC Innovation Banking disclaims all liability in respect to actions taken or not taken based on any or all of the contents in this document to the fullest extent permitted by law. Nothing relating to this material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
