The Startup Whisperer’s Secrets: How to Raise Capital in 2024

If you’ve been hanging around the hoop in the startup world for a while, you get to know many of the different players. The founders stand out for their passionate beliefs and tend to fall into a few types: the engineer, the product person, and the visionary. Then you’ve got the heads of growth, sales, retention, and technology. Plus the investors, from angels to seed to the big boys and girls with large checkbooks. Finally, there are the advisors, and that’s where you find a handful of people you could call startup whisperers.

The whispers may have a big job in a large tech company (a strategic acquirer naturally) or maybe a founder who’s had a good exit or even two. Or a well-established lawyer or marketing pro. They take a genuine interest in understanding what works, how to help people grow, and arguably most important, what stage of the cycle we’re in. Some of these folks self-identify as whisperers and even offer their services professionally to entrepreneurs and startups. Others prefer to operate behind-the-scenes, rarely calling attention to the role they play.

Recently, I had the chance to catch up with a startup whisperer who works with literally dozens of companies but keeps a deliberately low profile. The topic, unsurprisingly, was just how hard it’s become to raise capital — outside of the white-hot AI sector of course — and what smart founders should do about it. Here are a few call outs:

The Free Money Fantasy is Over — You can no longer raise money on a great concept. You need to get real feedback from industry pros, entrepreneurs, friendly-investors, and others before you even think about pitching your startup to venture capitalists.

Path to Breakeven or Better — Unless you have potential infinite scalability, i.e., select AI applications, you need to lay out how your business will become self-sustaining. Right now, especially in the Direct-to-Consumer space, startups are collapsing due to unsustainable cash burn. Show how your business gets to cash flow neutral, at the very least!

Show Up with Value — The slowdown in exits over the past 18 months, plus the current wave of crackups, means venture capital funds are under meaningful pressure too. What can founders do about it? The answer: instead of just thinking about what a VC can do for you, consider how you can help them. Start by introducing VCs to other potential founders (shows true confidence and a long-term mindset). Send potential investors their way too. Adopt this mindset and deliver, even on a modest scale, and you will stand out for your maturity and effectiveness. That’s the type of founder everyone wants to invest in, but struggle to find.

Good News Travels Fast — Part of showing up with value is also recognizing when your idea is not a fit. As a general rule, you will know very quickly whether there is interest based on the investor’s engagement (text or email) over the proceeding 24–48 hours after you’ve met. If there’s not, treat the VC as a relationship to nurture over time, which brings us to our Whisperer’s biggest point.

Build Your Ecosystem: Ultimately, the best founders take responsibility for their destinies to the greatest extent possible. For example, they understand how the system works. VCs have relationships with bankers, lawyers, execs, agencies, etc. Together, they act like a scouting system. Think college football to pro football recruiting. As a founder, if you build a reputation in the relevant ecosystems, your company’s name will already have come up with target VCs before you have your first meeting. Nothing helps getting to “yes” more than when your startup is already a deal people want to be in!

Watch for the Greenshoots: Whenever you feel like giving up, that it’s all just too hard, remember that change is the only constant. Even right now we’re seeing green shoots: more seed and Series A capital deployed. M&A is picking up too. It means greater opportunities for businesses in need of a quick exit and more potential for strong growth businesses to align with the right strategic acquirer or PE shop.

Our Whisperer left us with one last thought.

Every founder who adapts and thrives today will be in an even stronger position when the cycle flips from bearish back to bullish. Regardless whether sentiment turns sooner or later, it’s always the right time to take advice from a savvy Whisperer.