Hire the Top 3% of Freelance Fundraising Consultants

Companies Looking to Raise Capital Can Benefit From Fundraising Consultants

Raising venture capital (VC) and other funds is highly competitive in the best of times. Approximately 5% of startups that seek VC funding receive it, and the most established investors fund less than 1% of the opportunities they review. Only one in three startups that raise a pre-seed or seed round go on to raise a Series A round successfully. According to the most recent data available, VC funding is at a fraction of the historic highs of 2020 and 2021.

Given these odds, for many companies it makes sense to hire a fundraising specialist—someone who’s an expert in the specialized concepts, terminology, requirements, and processes of startup fundraising. A top-notch consultant can help you navigate the landscape and win the funding your company needs.

Fundraising is as diverse as the organizations that undertake it—from tech startups to foundations, universities, and other nonprofits looking to expand their fundraising capacity and impact. For startups, many factors play into the difference between raising the round or not, to say nothing of whether that round is the best option for a company. Company narratives, metrics, and investor profiles differ across funding rounds. For example, raising your seed round from angel investors and your Series A from venture funds involves vastly different rules, and correctly executing your current round requires you to understand it within the context of the next round. Then there are terms that must be negotiated with funders that can substantially impact valuation, dilution, controls, and more. Even the amount raised must be carefully considered, as raising too much can be just as dangerous as raising too little. That’s because it can result in awarding your investors more equity than you’d otherwise need to and/or mean that your company valuation is higher than it otherwise would be, which can affect fundraising efforts further down the road.

Complicating the situation further, venture finance sources are evolving rapidly. New players, such as angel funds, family offices, in-house corporate funds, and crowdfunding platforms increasingly operate in the same space as traditional venture funds. Each investor type brings unique trade-offs and a wide range of investment theses, abilities, resources, and attitudes toward their portfolio companies. That’s why hiring the right fundraising expert or fundraising consulting firm can be a worthwhile investment.

In this guide, we discuss why, how, and when to hire a fundraising consultant, outline the attributes and skills to look for, and provide sample interview questions to help you select the best fundraising specialist for your goals. While we focus on VC fundraising, we also discuss the needs of nonprofits.

What attributes distinguish quality Fundraising Consultants from others?

Fundraising entails a complicated, high-stakes transaction, and a quality fundraising consultant must have significant experience in multiple funding rounds as a founder, investor, or both. There’s no substitute for this direct involvement with the specific deal terms, types, and language used in transactions with VC investors and other funding sources. Experience with different market conditions is particularly beneficial since venture funding follows a cyclical trajectory with vastly different fundraising environments and best practices at different moments.

As you consider experience, it’s key to look for a consultant who has been involved with similar projects—for example, startups versus nonprofits. Fundraising for nonprofits, such as foundations, universities, and impact-driven organizations, requires the same overall skill set as fundraising for business ventures, but the key aspects of fundraising are applied in a different landscape with different funding sources and processes. The core commonality is the importance of a compelling narrative on the organization’s mission and expected impact that breathes life into the numbers and other technical elements of a pitch. The core distinction is that the assumption for a private venture investor is the acceptance of a significant risk of loss in return for the prospect of disproportionate financial gain, while nonprofit donors typically seek the assurance of an enduring legacy with significantly less risk.

While depth and relevance of experience are more important than duration, a general guideline is to look for at least five years working on transactions similar to the one at hand.

An expert fundraising consultant should also demonstrate a clear desire to help entrepreneurs navigate this critical and sometimes make-or-break moment. As mentioned, they should have closed deals, and they should be motivated to share the knowledge they may have wished they had at the time.

Finally, look for the consultant’s willingness to use tough love. Their job is to prepare you for a potentially stressful transaction, so they must be willing to bring all blindspots or shaky assumptions to your attention before investors do. This demonstrates their commitment to helping you succeed, no matter how intense the process becomes.

How can you identify the ideal Fundraising Consultant for you?

Fundraising is a means to an end—to achieve company goals and get closer to your long-term vision. Above all, identifying the right fundraising consultant for your business requires clarity on how you plan to use the capital and what you seek from those who provide it. The ideal fundraising consultant will translate your company vision and goals into a customized fundraising plan that includes how much to raise, what terms to offer, the types of investors to approach, and how to make your company as attractive as possible to potential funders. Thorough fundraising planning demands far more than financial prowess; the fundraising consultant must demonstrate not only previous experience, but also proven creativity in bringing these elements together.

Since the fundraising expert will work alongside you to create your pitch deck and then receive and negotiate a term sheet, they should be able to articulate clearly what makes your company unique and the risks and challenges you face. You should also feel that you and they communicate well and have compatible work styles.

Finally, the ideal candidate will offer a mix of hard and soft skills to craft and prepare you to present your investment narrative in numbers and words. Beyond relevant fundraising expertise, the fundraising consultant you choose should have as many of these complementary skills as possible:

Finally, bear in mind that if your resources allow, your fundraising expert may benefit from the support of a junior or mid-level analyst or even a fundraising team to help with research and analysis.

How to Write a Fundraising Consultant Job Description for Your Project

You don’t need specific knowledge of fundraising to write a good job description. The fundraising consultant’s role includes familiarizing you with the relevant terminology and practices and guiding you every step of the way. Your aim in the job description is to clearly convey your company’s unique value proposition, fundraising history, growth trajectory, and overall fundraising goals (both the amount of capital you’re trying to raise and why). Your fundraising target will probably evolve as you work with the consultant, but providing a general estimate—for example, $5 million, $20 million, or $100 million—helps to establish the type of round and investors you’re seeking, which will help candidates self-select based on their experience. If you’re not ready to provide this estimate, a clear overview of your company’s stage and fundraising history should suffice.

The most important candidate requirement to specify in your job description? They should have prior involvement in successfully closing fundraising rounds analogous to yours in terms of size and stage. You can also list direct experience in your industry as a plus, but it should rarely be a requirement. Many top venture investors are generalists who invest across multiple industries, and your company may pivot and enter additional markets over time. If you work in a frontier technology or industry with a highly specific market and investor base—think quantum computing or space tech—industry expertise may be more relevant but is probably still not an absolute necessity. The fundraising expert’s ability to grasp your business model and market potential is what’s really needed to help you complete your funding round.

What are the most important Fundraising Consultant interview questions?

By the interview stage, you should have information about the depth of the consultant’s experience in closing deals. In the interview itself, focus on exploring the lessons they learned from their experiences and evaluate their explanations of how those learnings apply to your company objectives. Your discussion should also help you determine whether the candidate would be a good overall fit for your business’s culture. The following sample questions will help you evaluate each fundraising consultant’s ability to meet your needs.

What specific fundraising strategies or techniques have you used successfully?

When you begin fundraising, it’s wise to assume that the process will take several months or longer. Given this time commitment and the many activities involved, the ideal consultant should be able to explain their approach to strategic planning for this investment of time and resources. Fundraising follows a sequence of stages—preparation of materials and investor research, pitching, and negotiating once offers are extended—but this will be an iterative process as you receive investor feedback and your company evolves. A quality fundraising consultant should be able to explain how they balance strategic planning and tactical processes, including the minimum outreach you should conduct per week.

How do you approach developing fundraising strategies tailored to an organization’s unique needs?

Fundraising experts should be able to speak to how they would customize their fundraising approach to these key dimensions of your company: your underlying technology, your geography, your cost structure, and your target market (and, as a corollary, what types of investors would add the most value). Debt financing, for example, may prove too risky for a pure SaaS company in its early stages, but it may be highly beneficial as part of the round for a robotics company with significant needs for hardware and working capital.

What are the legal and ethical considerations involved in fundraising, and how do you ensure compliance?

Entrepreneurship and innovation carry great risks. Many notorious scandals in the technology world show the dangers of uncertainty accumulating and driving a company toward collapse. A fundraising expert should be able to articulate how they strike the right balance between providing the most compelling narrative possible to your investors—including what you expect to achieve in the future—and being transparent about where your company is right now. This skill is both qualitative (in terms of how they prepare your company narrative) and quantitative (in terms of how they convey key metrics such as growth, retention, engagement, annual run rate, customer acquisition costs, and lifetime value).

What is your process for conducting investor (or donor) research and identifying potential funding sources?

Given the low odds of getting funding, startup leaders will generally want a substantial initial list of at least 100 investor prospects. Online sources that consultants use include independent rankings and lists, investor websites and social media, publications that track venture investing activity, and paid or freemium platforms like Crunchbase, PitchBook, and wealth screening solutions. (For nonprofit fundraisers, PitchBook also includes capital sources typically associated with that sector, including government, university, and impact investors.)

A good fundraising consultant should be able to explain their standard approach to efficiently finding and narrowing down your best prospects from this abundance of information. There are many viable strategies for this, but the consultant should be able to explain a specific approach that has delivered results in the past.

What are the biggest mistakes you’ve witnessed people in my position make while fundraising?

Just like entrepreneurship, a great deal of fundraising comes down to avoiding the many pitfalls. Some of the worst mistakes can be dangerous precisely because they seem positive in the moment—for example, raising too much capital or accepting a valuation that’s too high. A fundraising expert should be able to provide their own war stories—much of their value lies in the challenges they’ve overcome. Beyond the bare facts, the answer demonstrates the consultant’s ability to learn from mistakes, which is a foundational survival skill in both entrepreneurship and fundraising.

To what extent do you involve yourself directly in the fundraising process?

It’s important to discuss this question in initial conversations to ensure alignment on expectations before you begin to work together. Generally, a fundraising consultant works with you to craft and execute your fundraising strategy but does not pitch on your behalf and does not provide direct introductions to investors. Potential funders will expect to speak directly with the founder(s) or CEO of your company. A fundraising consultant’s job is to provide the knowledge and support you need to complete the round yourself.

What advice would you give me about how to approach investor (or donor) relations?

Whether you are fundraising for a startup or a nonprofit, ongoing communication and relationships with donors or investors increase the probability that they will add value through their knowledge and contacts and participate in future funding rounds. Beyond those direct benefits, having a good relationship with funders also serves as a positive signal to prospective donors or investors. Candidates should know that investor communication typically occurs on a quarterly basis, but you may also seek investor counsel at certain key moments—when launching a new funding round, for example, or making a major decision, such as acquiring a company or entering a new market. It’s important to keep the process as focused and efficient as possible to maximize its impact and minimize the demands on time for you and your investors. An experienced fundraising consultant can help you create the reporting system, process, and template to ensure that the most relevant information is communicated with as much automation as possible.

Based on everything you know about my company at this moment, hypothetically, why would you invest, and why would you not invest?

The interview doubles as an unofficial feasibility study for your fundraising goals. This question requires fundraising consultants to give a clear answer as to what they see as the key opportunities and risks for your company from an investor perspective. They should be willing and able to give at least one concrete answer to each part of the question and demonstrate their grasp of your company and their willingness to use tough love when required.

Why do companies hire Fundraising Consultants?

Companies hire fundraising consultants because the right expert can dramatically increase the likelihood that they will achieve their capital fundraising goals with favorable terms and value-added investors. When you’re approaching a first funding round, hiring a quality fundraising consultant can mean the difference between success and failure in terms of closing the round and achieving beneficial terms. Even if the business owner has deep experience in fundraising, a top consultant’s fresh perspective and ongoing support can identify blind spots, strengthen the fundraising strategy, and perfect the narrative.

When is the right time to hire a Fundraising Consultant?

The moment to hire is when you’re facing a decision or task related to fundraising that you feel would benefit from expert help. That said, it’s generally wisest to start working with an expert early in the fundraising process. That’s because the first key questions may be whether to raise external capital at all and, if so, how much and in what timeframe—topics on which a quality fundraising consultant can provide unbiased input. Once the decision to raise capital is made, collaborating with a consultant on key aspects of fundraising, such as positioning your company, researching the right investors, and preparing the materials, can add considerable value well before the pitching and negotiating begin.

How do you measure the ROI of hiring a Fundraising Consultant?

When you hire a fundraising consultant, the most important return on your investment is closing a funding round with terms and investors you’re pleased with. It’s impossible to know what the outcome would have been without the consultant. But the difference between your materials, confidence, and progress before and after hiring them should help you estimate the value that you’ve received.