Your fundraising is a numbers game: building investor pipeline and nurturing momentum

Let’s face a hard fact: a big chunk of Seed rounds fail because founders never engage with 50+ investors. Whether you are aiming for a $5M or $10M raise, building a qualified investor pipeline is the key to making the fundraising work. In this article, we explain how to build that pipeline - and why it can mean the difference between success and a missed opportunity. This is the second in the series. The previous one introduced three overarching concepts that shape your startup’s valuation - value, price, and VC economics. That piece focused on value - your company’s intrinsic merits and growth potential - alongside a simple valuation formula for Pre-Seed and Seed stages, plus insights on traction. Now let’s dive into the mechanics of fundraising, driving the demand and making it work. 

The macro vs. the micro

Fundraising success hinges on the intersection of demand and supply at both macro and micro levels. On the macro side, when the overall venture market contracts, the supply of investor capital shrinks while the demand for quality startups remains steady - altering the dynamics and limiting available funds. On the micro side, however, you have the power to shift this balance in your favor by building a robust network of potential backers. By actively nurturing relationships and creating competitive interest in your round, you effectively boost demand relative to your funding needs. Even in challenging markets, founders who manage this delicate balance can secure more favorable terms than those relying on a few scattered conversations.

Why it’s a numbers game

Securing a favorable price for your round depends on generating enough demand from investors who can truly fund you. Even if you only need $5M to $10M, the most effective founders often assemble a list of 50-100 qualified investors – those you have built genuine relationships with through warm introductions. A warm intro is not a cold email, it’s an introduction via a trusted connection, a mutual acquaintance, or a prior conversation that establishes rapport and credibility. Consistently nurturing these connections over time makes future conversations more natural and productive. The core idea is that these individuals or firms should collectively be able to deploy $50M to $100M, far exceeding your target raise.

Why is this “qualifying” step so crucial? Because a randomly downloaded list of names will not help you much if they have no prior relationship with you or your company. Successful CEOs are always raising - either actively during a formal fundraise or passively by growing these relationships in the background. By consistently nurturing these connections, you make future conversations more efficient and you are far less likely to find yourself scrambling for leads when it is time to close a round.

If your average check size hovers around $1M, some of those investors might come in at $100K while others could commit $5M. While having a pipeline of 50-100 investors is ideal for leverage – you can meet or exceed your goals even if only a subset ultimately commits - It’s important to recognize the trade-offs. Chasing too many names without deep, meaningful relationships can lead to diminishing returns. Focus on nurturing 10-15 high-quality, warm leads to drive momentum, and allow additional contacts to support your broader network.

Building a pipeline of 50-100 investors isn’t just a numbers game - it’s an emotional marathon. Many founders feel overwhelmed juggling dozens of relationships, often experiencing both the exhilaration of a new lead and the exhaustion of constant follow-up. Yet, this discipline in nurturing relationships is essential to ensure you are never scrambling when it’s time to close a round.

How to build a qualified investor pipeline

Compiling names is not enough. You gain real power by splitting your list into strategic categories, each reflecting a different role in your round. The first and most critical segment comprises lead investors, who can write checks covering 40-100% of your total raise and have the capacity - plus the reputation - to price the round. Once you lock in a strong lead, smaller or more risk-averse investors often gain the confidence to follow.

If an investor cannot lead, they generally fall into one of two sub-categories. Some provide smaller checks yet move quickly on a SAFE with a discount (or SAFE with an MFN clause - ‘MFN’ stands for ‘Most Favored Nation,’ meaning they receive the best terms later offered) to streamline early commitments, especially if they share your vision. If you are aligned on strategy, it can be wise to close these high-conviction checks early to build momentum. Others are follower investors who prefer to wait for a lead to define terms. They might be enthusiastic but will not commit until a bigger name sets a valuation.

A separate group comprises bigger investors who cannot price the round - often strategic backers or corporate venture capital (CVC) arms. They require another fund to establish a valuation, but their commitment can become a powerful magnet for other investors, especially in deep tech or specialized sectors (e.g. life sciences, space tech, etc). Having a CVC on board can signal valuable industry partnerships and deepen credibility.

A slightly different approach is to parse your pipeline by current investors, top-tier or “dream” investors, and plan B investors. Your existing backers can validate your pitch and offer candid feedback. Dream investors combine expertise, brand recognition, and market reach - securing them early can attract other firms, help you recruit talent, and signal to customers that you are poised for significant growth. Finally, plan B investors stand ready if dream names take too long or fail to materialize on favorable terms.

Nurturing fundraising momentum and investor updates

A well-structured pipeline is the foundation; momentum is the accelerator. Once you decide to raise, condense your fundraising efforts within about a month to create real urgency. Leverage hot milestones - like key product launches, or major customer wins - and announce limited-time opportunities for early commitments to spark investor FOMO. Additionally, accumulate news and updates over several months, then release them within that concentrated period to amplify momentum. Crucially, build this momentum around a core element that directly addresses your company’s major obstacle or the key investor objection you must overcome; if you are not targeting that major hurdle, you may be hitting the wrong target. For instance, if the major investor concern is the acceptance of your product by larger customers you will hardly build a successful momentum by announcing closing of many more small accounts.

Momentum also rests on continued nurturing of your relationships. It is a good idea to send out consistent newsletters or periodic updates, so target investors remain looped in on your progress. This regular touchpoint can transform a casual observer into a warm lead, especially when they see notable traction or key product milestones. However, always sense-check such newsletters with a limited circle of trusted advisors before sending them out broadly - this extra step ensures your communication hits the right balance between informative and strategic.

When it comes to sequencing conversations, many founders begin with their current investors for initial feedback, then refine their approach with mid-tier funds. By the time they reach dream investors, they have honed their pitch and can respond effectively to common objections. Founders also keep a plan B list in reserve, just in case top-tier talks falter or the round requires a few extra checks to close. Thorough planning and diligent relationship management often distinguish a rushed, lukewarm raise from a well-received, highly competitive one.

Always be honest: it’s acceptable to say your cup is 40% full (vs you have 60% gap to fill) rather than overselling, because exaggeration raises red flags.

Key Takeaways

• Consistently build a pipeline of 50-100 warm, high-quality investor relationships through genuine, long-term connections.
• Prioritize and secure lead investors who can commit 40-100% of your round, while nurturing 10-15 deep, strategic relationships to drive momentum.
• Leverage relationships with experienced founders who have previously raised capital - small investments from seasoned founders can signal credibility, accelerate momentum, and attract additional investors.
• Create urgency by leveraging hot milestones, and by accumulating and releasing news and updates within a concentrated period - always with honest, transparent communication.
• Focus on building momentum around your company’s key hurdle or the primary investor objection; avoid overselling and balance quality with quantity to ensure every relationship is meaningful.

PS: Thank you goes to Georgy Melkonyan, CEO and co-founder of Arnata, for his valuable contributions.