On the Horizon

What's Next for Early Stage Startup Fundraising

It's more achievable than ever before for anyone, no matter their background, to build a startup and enter into It'sthe VC world. With AI tools speeding up development and GTM processes, and more access to startup growth secrets through founders building in public and communities like HubSpot for Startups, the possibilities are vast.

"The bar it takes to start something today keeps getting lower and lower, and I think that's exciting.” say Arjun Mahadevan of doola. “With tools to spin up websites automatically these days, and tools like doola to start your business, and tools like HubSpot to set up your CRM and have everything set up there and integrated, too, that's really exciting."

Fundraising checklist for early-stage startups

Pre-Seed to Seed

Series A to Series B

Get involved in startup and investing communities.

Explore HubSpot for Startups, Startup Grind, and others, and regularly attend local or virtual events in your space.

Explore ways to showcase any AI features or tools in your business growth plan.

Highlight your product development milestones and consider building in public to regularly engage investors.

Establish your network and build relationships that can help facilitate warm handoffs.

"I'm a huge advocate of an online presence and posting regularly. I cannot count how many opportunities have come my way just because of LinkedIn," advises Eva Dobrzanska, Managing Director of Fundraising Playbooks. "Post and talk to people and showcase what you've been doing. The community aspect is huge — it's a small world."

Build your personal brand and showcase why you're the right person to transform your solution into a sustainable business.

"For better or worse, we live in the age of social media. If you don't have an online presence, you're at a disadvantage. With my clients, we've utilized emails, follow ups, LinkedIn posts, Twitter posts, a Substack blog, and other channels to get their name in front of the right investors as many times as possible," added Eva.

Use AI tools to conduct cold and warm outreach, send follow ups, and run analyses.

Tools like HubSpot's Breeze Prospecting Agent can give founders a boost by speeding up meaningful outreach and helping them identify top investor prospects.

Treat investor management like sales—use a CRM and nurture relationships.

Manage investors in a smart CRM, and operate your fundraising process like a sales process. Nurture your prospects.

Research potential investors and understand their fundraising motivations and goals.

Use Fundraising Playbooks for templates and advice for fundraising outreach.

Regularly share revenue and financial updates with investors and prospects.

Frequently provide updates on the health of your business through dashboards and automated reports, like HubSpot's dashboard and reporting tools. "So much data, so much of what we learn about teams is gathered through multiple interactions with them over time, as we see how they iterate on their thoughts, as we see how they understand the market more, they understand the customers a bit more," shared Josephine Chen, Partner at Sequoia Capital.

Key takeaways and recommendations for startups

Brandon and Nate from HubSpot Ventures give founders an optimistic perspective, "It's about the market dynamics and there being a really good 'why now?' We look for the intersection between the market and an outlier founder. And in all our early stage companies, we want to see velocity. And velocity is both speed and direction."

“Some of the most extraordinary companies in the world got built during pressing times or down cycles. Even during a broader pullback within the asset class, well-positioned and differentiated businesses can land funding from the right firms for their company and stage.

“Right now, there's somewhat of a rewriting happening in software development and consumption. These massive technological shifts are impacting the way we work and the way we generate and consume information. It's an exciting time to be a builder, and for those with a clear vision of the customer they want to serve, there will be great opportunities for a new class of founders and investors.”

"At the end of the day, every VC kind of looks at similar things, but everyone weighs all the different characteristics slightly differently. We all look at the market, we all look at the founder, we all look at the product and the insight and the level of customer love," shared Josephine Chen, Partner at Sequoia Capital. "And then, for each stage, we weigh different parts of these slightly differently. For early stage, fundraising markets don't make that big a difference — every fundraise is your opportunity to recruit a partner."

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