"I can't wait to get back to work.  This fundraising is a real drag on my day job."

– Startup CEO raising capital

We have a number of portfolio companies that are raising money.  When I talk to my CEOs that in the midst of this process, almost all of them complain about the same thing.  They dislike the fundraising process and can't wait until it's over.  They view it as a distraction from their day job and a non value-added chore.

I love the CEOs I work with.  But when I hear these complaints, which echo those of other entrepereneurs I know, I can't help but think how dead wrong they are.

Raising capital is a core part of building a valuable business.  Whether you are raising a $250K seed round or navigating a $100M IPO, the capital markets – in all of its various forms – are a fundamental constituent in the business-building journey.

Developing expertise in raising capital is more than a necessary evil, it's a competitive weapon.  If you have a stronger balance sheet than your competition, you can push off monetization decisions and focus on product-market fit.  You can take more risks on partner deals, focusing on long-term value creation, not short-term gain.  If you have a larger cash horde than your competition, you can make aggressive hires, attract better talent, perhaps even make acquisitions.  Adding some debt onto your balance sheet will lower your cost of capital and your dilution, which is better for existing investors and the management team.  In other words, being able to efficiently access the capital markets is as core to business-building as product management, go to market and your profit formula.

I admit that fundraising can be painful – and certainly I felt the pain when I was an entrepreneur and had to explain the same story over and over again to prospective investors of varying intelligence and sophistication – so, all joking aside, I am sympathetic to the complaints.  But in the process of fundraising, I always gathered valuable feedback from savvy investors who understood the market and had a broad perspective.  Seeing my firm through their eyes gave me valuable insight and often caused me to make adjustments along the way – in many cases, critical adjustments to our business model or approach based on the feedback.

A cynic might suggest that I'm supposed to have this perspective because, as a venture capitalist, I'm bound to think that my role in the start-up ecosystem is an important one.  But that's not entirely true.  For example, I have huge respect and passion for product development and the role of the product manager.  I spend alot of time with my portfolio companies on their go-to-market strategy, partnerships and scaling sales.  

But I do think the cultural pendulum in the startup world has swung too far away from requiring entrepreneurs to be financially savvy.  The best entrepreneurs develop acumen across a range of business-building disciplines, including general management and finance.  They view fundraising as one of the multiple dimensions that are a core part of their job, not an ancillary distraction or necessary nuisance.

Being an entrepreneur is a really hard and lonely journey.  Entrepreneurs need to "major" in some disciplines and "minor" in others.  They can't be so focused on, say, product development that they can ignore a major discipline like fundraising.  Whining about fundraising, particularly to investors in the midst of the financing process, isn't a winning approach.