What’s the best way to decide when to raise money?

Bruce Gibney (Former Partner @ Founders Fund)
Peter Thiel’s CS183: Startup – Class 8 Notes Essay

You should always try to pitch when you don’t need money. That is when you are strongest. Short runways are often perceived as a sign of massive weakness. If everybody knows you’re desperate, the best that can happen is you get screwed on terms.

Mark Suster (Managing Partner at Upfront Ventures)
Founder Showcase – Mark Suster Keynote on Vimeo

In normal funding cycles it can take 3, 4 or 5 months to raise capital.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Reblog: VC Cliché of the Week – AVC

Some of the best companies I’ve ever worked with were funded at the height of the last bubble and they are doing great now. So it doesn’t really matter when you start a company, but it does matter that you can make it through tough times. Because right now we have a rising tide that is lifting all boats and that won’t last forever.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
VCs as Gas Stations – AVC

You should raise money when you still have a fair bit of cash in the bank. Driving around on fumes frantically trying to find a gas station is not a great idea. Raising a round when you have a month of cash left isn’t either. I am happy to fill up at a fair price at a place that I like and is convenient to me. I would apply the same rule to raising money. Don’t shop for the very best deal, particularly if it means an elongated fundraising process… (read more)

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

Avoid investors till you decide to raise money, and then when you do, talk to them all in parallel, prioritized by expected value, and accept offers [assuming you have very low odds of getting other offers]. That’s fundraising in one sentence. Don’t introduce complicated optimizations, and don’t let investors introduce complications either.

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Convince Investors

Convince yourself that your startup is worth investing in, and then when you explain this to investors they’ll believe you. And by convince yourself, I don’t mean play mind games with yourself to boost your confidence. I mean truly evaluate whether your startup is worth investing in. If it isn’t, don’t try to raise money.

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

If you haven’t earned people’s respect yet, fundraising on traction is an order of magnitude easier than fundraising on a story. If you have to raise on a story but don’t have the reputation, something’s wrong.

Mike Cassidy (Four successful exits – Ruba, Xfire, DirectHit, StylusInnovation)
Four Keys to Raising VC

Raise money when conditions are in your favor [e.g. a business deal is closing]. Get all the decision makers in the room. Synchronize your timing to get competing offers. Bring if/then contracts to the VC meeting. [If we do X then customer will pay us Y]