Counter-cyclical fundraising is powerful. When capital is scarce, the herd mentality subsides, reducing competition and allowing savvy investors and founders to secure better opportunities and terms. It's a contrarian approach that capitalizes on market lows when others are fearful.

Contrary to common advice, the founder deliberately raised capital in small increments, never securing more than 12 months of runway. He found this self-imposed pressure was a powerful forcing function that kept him and the team sharp and focused on hitting critical milestones.

Many unicorns from the zero-interest-rate period haven't raised since 2022 because they are in a strategic holding pattern. Unable to raise without a valuation hit or exit, their playbook is to use existing cash to grow organically and hope profitability eventually justifies their last-round valuation.

The best time to raise money is when your company doesn't desperately need it. Approaching investors from a position of strength gives you leverage. If you wait until you're desperate, you will be forced to accept expensive, highly dilutive capital.

Kukun's founder raised all capital via convertible notes before 2022, intentionally avoiding a priced equity round. When the VC market tightened, this strategy allowed the company to "live within its means" without being anchored to a valuation. This provided control and flexibility, preventing a potential down round while preserving ownership.

While first-time founders often optimize for the highest valuation, experienced entrepreneurs know this is a trap. They deliberately raise at a reasonable price, even if a higher one is available. This preserves strategic flexibility, makes future fundraising less perilous, and keeps options open—which is more valuable than a vanity valuation.

Ather faced three successive valuation cuts (40%, 50%, 65%) that would kill most startups. They retained their team by being radically transparent about finances, asking for voluntary pay cuts, and building trust by later rewarding those sacrifices with bonuses and equity at the lower valuations.

The first question in any fundraising or M&A discussion is always, 'What was your last round price?' An inflated number creates psychological friction and can halt negotiations before they begin. Founders should optimize for a valuation that allows for a clear up-round, not just the highest price today.

Reflecting on raising $35M, Ergatta's founder suggests taking less capital might have been wiser. While tempting to raise as much as possible, large funding rounds lock the company into a specific financial trajectory and set of expectations. Raising less money can preserve crucial optionality and flexibility for the business's future.