The holiday season is an ideal time to preempt funding rounds. The lack of office chatter allows for quiet negotiations, giving both VCs and founders a low-risk environment to discuss terms. VCs can also enforce tight deadlines, like "sign by New Year's," more effectively.
To win the best pre-seed deals, investors should engage high-potential talent during their 'founder curious' phase, long before a formal fundraise. The real competition is guiding them toward conviction on their own timeline, not battling other VCs for a term sheet later.
Raise capital when you can clearly see upcoming growth and need resources to service it. Tying your timeline to operational milestones, like onboarding new customers, creates genuine urgency and momentum. This drives investor FOMO and helps close deals more effectively than an arbitrary deadline.
Conventional wisdom says to pause sales outreach in late December. However, many prospects remain highly responsive as they look for distractions from family events. The decrease in overall business noise can also make your message stand out more easily.
It's tempting to push late-stage deals into January, but this is a dangerous trap. Once the holiday break occurs, momentum is lost and priorities shift, meaning these deals rarely close. Leaders must create urgency to close before year-end, as rollovers are effectively lost opportunities.
In a challenging fundraising climate, formal processes are insufficient. SpliceBio's CEO secured their lead Series B investor by starting informal conversations a full year before the official round. This long-term relationship-building establishes trust and allows investors to track execution over time, which is critical when capital is tight.
A generic tax-savings pitch can fail. Research if a prospect is cash-constrained or capital-rich. Offer flexible payment options to the former and highlight strategic reinvestment value to the latter, demonstrating true empathy and relevance.
To win highly sought-after deals, growth investors must build relationships years in advance. This involves providing tangible help with hiring, customer introductions, and strategic advice, effectively acting as an investor long before deploying capital.
Venture capital isn't a constant sprint. It has distinct seasons, both in an investor's career (e.g., a 'deep learning' phase) and throughout the calendar year. Summer is for strategic thinking due to fewer meetings, while the period from Labor Day to Thanksgiving is peak deal-making season.
To finalize an 18-month negotiation with music labels, Eleven Labs set deadlines to create urgency. These 'forcing functions' proved effective in driving the deal forward, even when the dates had to be moved. The imposed timeline compelled parties to make decisions and find a resolution.
The most sought-after YC companies have rounds that fill and oversubscribe on the first day of fundraising, often within hours. This extreme velocity means VCs who require multiple meetings or lengthy diligence will lose the deal, necessitating a process built for one-call decisions.