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October 31, 2022

Can You Fundraise During the Holiday Season?

Can You Fundraise During the Holiday Season?

Around the “Holiday season”, from November to January, many founders ask if they can still fundraise: Is it possible? How should we do it? What are the alternatives?

Here are answers to the most common questions about Holiday fundraising.

Can you Fundraise during the Holiday Season?

What: Yes, but there’s a catch. Despite popular belief, Q4 is often a strong quarter for startup investment across all stages. However, you will have to navigate losing 2–3 weeks of productive time due to Thanksgiving, Christmas, Hanukkah, and New Years, just to name a few.

Why: Even the most excited investors are unlikely to commit to an investment on a holiday. It’s not a reflection on your company, but rather a common preference to preserve personal time. In addition, the chances of all stakeholders signing during this time is slim.

What Tactics Work during the Holiday Season?

What: Start early, ideally in October, with all first meetings completed before Thanksgiving. Aim for 15 meetings per week and stop after 2 weeks if you do not see strong demand for a meeting #2 from 40% of first meetings.

Why: If you’ve generated significant investor interest by Thanksgiving, you’ll have 3 weeks in December to close the round before Christmas and New Year’s. This deadline provides ample time and creates a forcing function with investors.

What are the Alternatives?

What: If you are not seeing strong inbound interest from investors or in a highly seasonal business, shift your focus towards growth in Q4 and plan to raise one quarter later in Q1.

Why: For most startups, the loss of time during Thanksgiving and Christmas makes starting the process in Q4 inefficient and likely to extend into Q1 anyway. You can always send a “good news” update to the investors on your mailing list to keep them interested before you raise.

There’s plenty of investment activity in Q4 to warrant fundraising during the holiday season, but the key is ensuring investor demand exists, and your timing is tight. Map out your realistic timeline to decide if your startup has the interest to close, within the shortened quarter, or if you should wait until Q1.

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Ash Rust

Ash Rust

Managing Partner, Sterling Road

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