Don't underestimate how long funding takes
Joyce Park stashed this in Startups
Don't forget that you see other companies at the successful conclusion of the process, and rarely find out how long it took... so you often get a false sense that it was quick and easy. When you actually talk to entrepreneurs, 6 - 8 months is not unrealistic!
No kidding. I am having a hard time with the disconnect between investors who espouse leanness and agility and then take a week and a half to return emails. Hire an assistant, chumps!
You can make progress in anything if you have the mindset that it will take 50 meetings.
Mark Suster had seed funding thoughts from a VC a few years ago, but he doesn't really talk about timeframes.
And Daniel Odio put together resources for raising $1 million in seed funding.
See also six secrets of fundraising success.
And for pitching see five magic slides.
Jeffrey, the thing to keep in mind is: everything takes longer than you think it will. :)
David S. Rose, an active seed investor, says 6-9 months is not unrealistic, just as Joyce says.
If you had a great product, positive beta testers, were located in an area (like SF, NYC or Boston) with an active angel and early-stage VC population, were connected enough to directly reach out to angels and or a local angel group, were flexible in your deal terms, and were in the right place at the right time with the right product. In that case, it would typically take you about three months from pitch to close, to pull together a round, work through the angel/VC process and get the cash you're looking for.
That's worth repeating: three months is the best case; 6-9 months is more the norm.
Those seem like accurate averages. There are seasonality factors as well - David Shen's post sums that up. And Naval spoke several times about "readiness" for funding in his talk at Founder Institute and I think that readiness accounts for the quick fundings we hear about on Angel List. (Ready, Aim, Fire!)
Thanks for those links, John -- I've noticed in 2011 the hot word is traction, although I've noticed that everyone's definition of traction is different.
Perhaps I asked the wrong question when I asked
In doing more web research I do see 9 months thrown around a lot. It takes as much to close a funding round as it takes to have a baby!
Heh, I buy the birth analogy... A bit of fun at the start of the process, a lot of hardship and suffering along the way, a painful experience at the end and then - WHAMMO, welcome to the starting line! By the way, I agree with David Shen's guideline about not raising money in the second half of the year.
In which case, just take the next six months off and start from scratch in January?
Sometimes you gotta do what you gotta do...
Are you proposing pausing development until the funding happens?
Of course not! Be ready for slower progress in second half and raise an amount so you can avoid that period when you're back for your next round. And don't pause development for anything!
Don't pause development, but plan on it being tougher in the second half than the first half, and plan accordingly.
There's another Convo that says to make progress -- in this case, get a decent term sheet -- the rule of thumb is that you need 50 coffee meetings: http://pandawhale.com/convo/197/you-can-make-progress-in-anything-with-50-coffee-meetings-get-started-msuster
It's a good rule of thumb in that it makes you realize it takes more time than you think it will.