The Summer Doldrums
We are entering the summer months when things move slower in the investor community. This is true of venture capital, but it is also true of other investment sectors as well. Summer vacations slow things down and investors also use the time to step back a bit and evaluate how the first half of the year has gone and plan for the second half.
I know many companies don’t like to raise capital in the summer months. While I understand that approach and it is conventional wisdom, I think the contrarian approach of raising in the summer can also work.
Raising money in the summer months will go slower and can be frustrating as you lose weeks at a time to vacations. Partner meetings are harder to get scheduled. And trying to get multiple potential investors on the same time frame is nearly impossible.
But the benefit of raising in the summer is that you are not competing with as many other companies to get the investor’s attention. You can more easily rise above the noise in the summer. Investors don’t take the summer off, they just slow things down a bit. So if you need to raise capital in the summer or just want to, you can make it work. You just need to allow more time for the process and be patient and flexible.
One advantage of raising in the summer is that you can take care of fueling the tank when things are slow with customers and be ready to step on the gas in the fall when things pick up again. The last four months of the year are often a sprint to the finish line and using up some of that energy raising is often suboptimal.
So if you find yourself in the market for capital this summer, don’t fret. But be prepared for a slog that doesn’t move as fast as you’d like it to. It’s the doldrums after all.