How to Raise Venture Capital Funds for a Tech Startup

How to raise venture capital funds for a tech startup is a question many ambitious founders eventually ask themselves. 

Tech companies, especially those in AI, gaming, blockchain, fintech, and deep tech, often need a lot of capital upfront before they can start making profits. 

On the other hand, Venture Capital's purpose is to help these startups scale quickly. 

In this article, you’ll learn how to raise VC funding. 

You will find out when you are ready, what investors look for, how to create your pitch deck, how to reach out to VCs, how due diligence works, and how to manage your startup after you get funding.

What Is a Tech Startup?

Before seeking venture capital, it's important to understand what a tech startup is. 

A tech startup is a young company focused on a product or service that relies on technology, with the goal of growing quickly and expanding.

At Konvoy, we invest in gaming and tech. 

Such as Deep Tech Startups that focus on scientific or engineering advancements, which require extensive research and development, as well as significant capital. 

We also support Enterprise Startups that create tools to improve business efficiency, as well as Consumer App startups that design technology for everyday users and require large audiences.

How to Raise Venture Capital Funds for a Tech Startup

To secure investment from a venture capital firm or an angel investor, we highly recommend creating a solid plan and sticking to it. 

Organization is fundamental to scaling from one step to another.

Below, we outline the ideal pathway for raising venture capital funds for a tech startup. 

1. Understand how venture capital works

Many people want to raise capital, but not many understand how we operate.

VC involves private investments in new companies that have the potential for rapid growth. 

In exchange for their money, investors get a share of the company and hope to earn returns through sales or public offerings. 

For more details, check our guides:

• Venture Capital vs Hedge Fund
• Venture Capital vs Private Equity

Tech founders, in particular, benefit from VC because products like AI, gaming, and SaaS often take time to become profitable.

2. Is your tech startup ready for VC?

Not all startups can raise venture capital. VCs look for:

• Your product should have early users, solid retention, recurring engagement, or revenue.

• Investors want to fund capable teams, not just good ideas. Founders should be able to build, launch, and manage their operations effectively.

• VCs prefer startups that can grow quickly. Consider models like SaaS or gaming platforms.

• Your total addressable market should be sizable enough to attract investment. 

3. Know the funding stages

Tech founders should know the stages of venture capital:

• Pre-seed: Validate the idea
• Seed: Develop a minimum viable product (MVP)
• Series A: Scale the business model
• Series B: Focus on expansion
• Series C: Aim for market dominance
• Exit: Sell the company or go public

For a full breakdown, read our guide: What Are the Stages of Venture Capital?

4. Prepare a strong pitch deck

Your pitch deck is the first impression your startup makes. 

You should use simple language and include these topics in your pitch:

• What issue does your product address?

• What is your product and why is it suitable?

• What is the market size and growth potential?

• How it works.

• How do you plan to make money?

• Share revenue, user numbers, partnerships, or waiting list data.

• Explain your unique qualifications.

• Provide a growth and profitability roadmap.

5. Build a target list of tech investors

Not every VC is the right fit for your startup. 

Identify investors who focus on your area first. 

For instance, before reaching out to us, check out Konvoy’s thesis.

6. Go for a short but effective email

Be clear with your subject, and in your body, include:

• One-sentence pitch
• Traction numbers
• Market opportunity
• Why are you contacting that specific investor
• Link to your deck

7. Have a meeting with investors 

Be ready to discuss your tech setup and your go-to-market strategy.

On the other hand, be very clear about how you acquire customers and your financial projections.

However, be honest about the risks and your plans to mitigate them.

8. Navigate due diligence

Raising capital also involves having clear paperwork.

During due diligence, stay organized. Investors will review:

• Legal structure
• Ownership chart 
• Intellectual property
• Financial records
• Product design
• Security practices
• Market entry metrics
• Data handling and compliance

9. Review and negotiate your term sheet

Don’t sign anything before understanding:

• Valuation
• Equity dilution
• Board seats
• Liquidation preferences
• The right to buy more shares
• Vesting schedules

We highly recommend always seeking legal advice before signing.

Also, read the best books about venture capital.

FAQs 

1. How do I know if my tech startup is ready to raise venture capital?

You’re ready when you have good traction, a product that can grow, a large market, and a strong team.

Investors want to see proof that your solution addresses a real problem that’s getting bigger.

2. What is the first step to raise venture capital funds for a tech startup?

Start by creating a strong pitch deck and outlining your fundraising plan. 

3. How long does it take to raise venture capital?

Most fundraising rounds take about 3 to 6 months. 

This timeframe can vary based on your traction, the investor, and current market conditions.

4. Which venture capital firms invest in tech startups?

Many firms invest in tech startups, each with its own focus and preferred stage. 

For instance, Konvoy is a global VC firm that funds companies shaping the future of interactive technology. 

We seek startups that are making breakthroughs in gaming, digital ecosystems, and related technologies.

In Summary

If you're creating something new in gaming, AI, infrastructure, or interactive technology, Konvoy can help. 

We invest in early-stage founders who are shaping the future of gaming and digital experiences. 

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