For early-stage companies and founders, few questions get asked more in the startup world than “When should I try to raise money?”

Although it would be much easier if there was a simple answer to this question, each founder and their respective startups face different obstacles when traversing the path to the point of fundraising.

On one hand, the longer you are able to wait to seek fundraising, the more valuable your company will be to an investor. If your company is further down the road, you will likely already have a finished product, you may have already amassed users / customers, and have successfully proven traction and product-market fit. Additionally, your company may already have an established team (as opposed to just a founder or co-founder), as well as a plan of action that may look impressive to an investor. At this stage, you have probably also received valuable feedback from the market, which gives not only credibility, but also quantifiable validation. The benefits to waiting until this stage are that you’ll generally be able to raise money faster, and since your company has already accomplished several milestones, it's likely that you won’t have to give up quite as much equity.

But for most of us, this is a hard-to-achieve goal. Very few founders have the ability to operate on just their savings alone, and, for those of us living in startup-centered cities like New York, San Francisco, or Boston - the cost of living is likely to take a toll on whatever expendable income exists in the beginning.

Therefore, the point at which you must seek outside funding is determined by your own personal situation as well as whether your company meets the minimum funding requirements set out by the investors.

Without a previous track record or without a strong vertical of expertise, you will have to be further along with your company in order to secure a round of funding. Oftentimes, your best bet in that situation is to go through an accelerator. By joining an accelerator, you will have access to many resources that you may lack internally as well as to a network of mentors and sometimes funding. You will also go through a structured program that will help your company evolve and grow quickly, and ultimately best position you for fundraising.

Keep in mind that the greater the ask, the more prepared and established your company will have to be.

Ultimately, the answer is different for every founder and company, but the further along you can get yourself, either through networking, finding creative solutions, or freeing up personal capital, the better your fundraising experience will be in the end.

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