Smart founders start thinking about their next round the day the last one closes. That’s just being prepared and taking a long view.
Still, an optimal fundraising round is also about timing. You want to get your company as close to paying for itself as possible, and only then decide whether outside funds are necessary to achieve your goals and scale up. You don’t want to take meetings until you’re positive you have a product that works and fills a real hole in the current marketplace. Think about your next round as fuel to pour on a fire that’s already burning.
Joel Gascoigne treated this as his bar before his company, Buffer, ever pitched a US investor. On TWiST, he describes getting to “ramen profitability,” a metric popularized by Paul Graham, which means that revenue is enough to cover the living expenses of the co-founders.
