"Why not pay someone to raise funds for my startup?" I WILL NOT PROMOTE

“Can I hire someone to raise money for my startup and give them 5% of whatever they bring in?” I get this question a lot. You know how to build your product. You don’t know any VCs. Somewhere out there is a person who knows all the VCs. Why would not hire that person and get back to work? But it depends on how much you’re raising. 🏦 If you’re raising a Series B, yes, you can hire an investment banker. They’ll help prepare the deck, line up investor meetings and negotiate term sheets. You still show up for the important conversations, but someone else can run most of the process. Expect something like $5k to $20k a month, plus 3% to 5% of the round. Say you agree to $10k a month plus 4%. Four months in, you’ve spent $40k even if nobody invests. Close a $10M round and the success fee is $400k. Does the $40k count toward that? Do they get 4% on the WHOLE round, including the check from the investor you’ve known for six years? This stuff should be discussed befor you sign. When would I pay that? If I had a decent shot at raising on my own , but thought a banker could get several funds to the table at the same time. Two competing term sheets can change the economics quite a bit; the valuation boost could more than offset the banker's fees. If investors are already chasing me , I’m mostly buying back my time. Value is debatable. If nobody wants the deal , I’m burning runway on a retainer for nothing. Just don't. 🧮 If you’re raising your first $500k, the math looks different. That 5% you offered is $25k in fees. The fundraiser might spend months helping you put the deck together, rehearse the pitch and meet investors. If the round falls through, they make $0. So most early-stage fundraising advisors will ask for a fixed fee. I used to be pretty skeptical of people who charge for intros. I’ve changed my mind a bit. If an advisor has spent years earning a partner’s trust, and that partner takes your meeting because the advisor personally vouched for you, there’s real value there. If their plan is to cold-email the partner, I’d much rather that email came from the founder. I’d also call a founder the advisor worked with whose round DIDN’T close. What did the advisor do when investors started passing? That’s the part you won’t get from the deal announcements on their website. 🕺 What I’d do as a first-time founder Run the raise myself and pay for the bits I need help with. If my deck is a mess, hire someone to fix it. If I have no idea which funds invest at my stage, pay for the research. And if I do hire an advisor, stay involved enough that I know how to do it myself next time. You can outsource quite a lot of the work. At some point, though, a partner is going to ask why a customer bought your product, why another one churned and what you learned from both. That’s the part they can only hear from you. PS: there are big cultural differences that I didn't mention. In the US , early-stage investors typically dislike fundraising advisors as a rule. In Europe , it's a mixed bag - some FAs are recognized and a few are even appreciated. In China or the Middle East , FAs are quite common and an active part of the ecosystem.