By Karen Deyo, VP of Product, Israel BD, LSN
One message we consistently emphasize when speaking with early-stage companies is the importance of looking beyond your local ecosystem and building relationships with investors globally. Too often, founders assume they have plenty of time to expand their network, particularly in regions that offer strong support for launching startups.
Paradoxically, those supportive ecosystems can create a false sense of security. Grants, incubators, and local funding programs can make it feel as though capital will always be available. In reality, many regions simply do not have enough follow-on capital to support every company that begins there. When the initial funding runs out, startups may suddenly find themselves approaching a financial cliff. At that point, companies that haven’t built relationships outside their region may be forced to accept unfavorable investment terms just to survive.
Another common misconception is that companies should only begin speaking with investors once they are actively fundraising. In practice, this approach often backfires. Founders tend to underestimate how long fundraising actually takes—a typical fundraising process can last anywhere from 9 to 18 months. Waiting until the last moment leaves little room to build relationships or refine the company’s strategy.
Early conversations with investors can be extremely valuable even when a company is not raising capital. Investors bring deep industry knowledge and experience, and their feedback can help companies sharpen their development plans, prioritize critical data, and better understand what will make them investable. Just as importantly, fundraising is ultimately driven by relationships. Building those relationships early can significantly accelerate the process when the time comes to raise capital.
Rather than treating fundraising as something that switches on and off, companies should think of it more like a dial—one that adjusts the intensity of their efforts over time. Engaging with investors early should be considered just as essential as customer discovery or market research. These conversations can help gauge investor interest, identify potential weaknesses in a strategy, and prevent companies from investing significant time and resources in a direction that may not resonate with the market.
Sometimes, this early feedback leads to a pivot that ultimately strengthens the company. Making adjustments sooner rather than later can help a startup reach the market faster—or even transform a company that might otherwise fail into one that achieves a successful exit.
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