To raise a funding round in 2027, you need to identify a milestone that justifies the capital, demonstrate why your company can reach it, and find investors whose mandate matches that opportunity. Then you have to execute a process: prepare evidence, test the pitch, coordinate conversations, and negotiate terms until the funds are received.
This guide was put together on November 11, 2026, to prepare for a round during 2027. It doesn’t assume how valuations or capital availability will evolve. It focuses on pre-seed and seed; a Series A requires more depth on metrics, corporate governance, and due diligence.
Does your company need venture capital?
Venture capital makes sense when capital lets you capture a growth opportunity whose risk and scale are compatible with the return a fund is looking for. A company can be profitable, valuable to its customers, and a poor fit for that model.
Before preparing the deck, write down what changes if you get funding. Can you complete a technical validation? Expand a sales channel that’s already working? Fund a development period that revenue doesn’t yet cover?
If the answer is “hire more people,” you still need to explain what result those hires will produce and why that result increases the value of the business.
Geoff Ralston’s fundraising guide for Y Combinator suggests tying the amount to profitability or to the next milestone that will let you fund the company further. It’s a useful criterion for designing the round. Its historical examples of costs and valuations aren’t benchmarks for 2027.
It’s also worth comparing alternatives: customer revenue, advance payments, grants, or non-dilutive financing. Debt requires evaluating repayment capacity; getting it doesn’t, by itself, fix a money-losing model without a financeable trajectory.
How much capital should you raise?
The size of a round should come from a monthly budget and a verifiable milestone. Runway is how long you can operate before running out of cash; net burn is the cash you consume after operating collections.
As a first approximation:
Capital to raise = projected cash consumption + extraordinary expenses + reserve − cash on hand.
The following simulation is our own and illustrative. It doesn’t represent an average round or a universal recommendation.
| Item | Assumption | Amount |
|---|---|---|
| Average net burn | USD 50,000 per month over 18 months | USD 900,000 |
| Extraordinary expenses | Implementations and infrastructure outside of burn | USD 100,000 |
| Reserve | 20% of the two previous items | USD 200,000 |
| Cash on hand at start of period | Not including the future round | −USD 200,000 |
| Capital to raise | 900,000 + 100,000 + 200,000 − 200,000 | USD 1,000,000 |
The 18 months and the 20% reserve are assumptions for this example. The right horizon depends on development, sales, and the time needed to fund the next stretch. Model cash flow month by month: an average can hide a shortfall that happens before the round closes.
That million dollars should buy a concrete change. For example, moving from paid pilots to renewed contracts and confirming that the margin can sustain the operation. “Getting to the next round” describes a funding need; it’s still missing the achievement that would convince the next investor.
Prepare one scenario with less capital and another with slower sales. If both require raising again before you’ve proven anything new, revisit your scope or cost structure.
What evidence do you need before you go out and raise money?
The evidence you need depends on the uncertainty the investor is accepting. At pre-seed, a technical validation or exceptional understanding of the problem can carry weight. At seed, sustained usage and commercial demand should let you discuss more than just a hypothesis.
These are analytical priorities, not universal requirements for each stage:
| Type of company | Evidence worth preparing | Confusion to avoid |
|---|---|---|
| B2B SaaS | Paying customers, cohort retention, margin, and sales cycle | Presenting pilots as consolidated recurring revenue |
| Marketplace | Repeat transactions, own revenue, and contribution margin | Confusing transaction volume with your own revenue |
| AI product | Repeat usage, quality, cost per task, and vendor dependency | Presenting a demo as proof of demand |
| Deep tech | Technical validation, intellectual property, and next milestones | Applying a SaaS benchmark to a different kind of technical risk |
Every number in the pitch should have a definition and backing. If you show annual recurring revenue, or ARR, clarify which contracts you’re including. If you show growth, state the period and the base. If you talk about margin, explain which costs you subtracted.
Separate observed results from projections. A sales pipeline can be evidence of interest; it’s not the same as signed contracts. That distinction needs to hold up in the deck, the financial model, and the conversations.
How do you build a narrative that holds up under scrutiny?
Preparing a round means coordinating two jobs: building your investor pipeline and developing a story built on a few core claims. Test that narrative before you present it to your priority investors.
To put this into practice, write down three or four claims that support the opportunity. Each one needs evidence and a condition that could disprove it.
| Illustrative claim | Evidence to look for | What would weaken it |
|---|---|---|
| This problem has budget behind it | Purchases, contracts, and identified decision-makers | There’s interest, but no one can pay |
| We can replace the current alternative | Sustained usage and measurable cost reduction | Implementation wipes out the savings |
| We can grow with a viable economics model | Margin per customer and repeatable acquisition | Every sale requires unbudgeted custom work |
The vision connects that evidence to a bigger opportunity. The leap between the two has to be explicit: how you go from your initial customer to the next segment, which capabilities you keep, and which ones you still need to build.
Sequoia’s guide to writing a business plan organizes the argument around purpose, problem, solution, market timing, competition, and business model. It’s a good framework for structuring your thinking, not a mandatory slide order.
Then test whether someone else can explain your company without your help. The partner who heard your pitch will have to defend the opportunity to people who weren’t in the room.
If you have traction but struggle to turn it into a story someone else can tell, that’s one of the problems we work on in The Program: a four-week sprint with the founding team to sharpen the vision and build a narrative that’s clear, competitive, and easy to share.
How do you choose the right investors?
The right investor has mandate, available capital, and a specific reason to look closely at your company. A fund’s name recognition says little about that fit.
Broaden your search beyond the funds you already know, without turning number of contacts into a quota. A specialized sector may have a small universe of suitable investors. Research the actual initial check size, the geography, and the stage the fund is investing in right now.
Your CRM should include:
- Fund and partner responsible for the relevant thesis.
- Stage, geography, check size, and possible role in the round.
- Evidence of fit: concrete past investments or public thesis statements.
- Potential conflicts with portfolio companies.
- Contact channel, status, owner, and next action with a date.
Distinguish who could lead the round from who could just join it. A lead usually takes on a central role in negotiation and evaluation; confirm how that works in each case.
If a multi-stage fund comes in early and doesn’t follow on later, other investors may wonder why. That doesn’t prove there’s a problem with the company: the decision can also reflect the fund’s mandate or capital availability. Specialized funds don’t eliminate that risk either. Ask who decides on follow-on, how they allocate reserves, and what support they offer if they don’t invest again.
For a Latin American startup, also verify that the fund can invest in your corporate structure and in the markets where you operate. Don’t confuse “invests in Latin America” with “can participate in this round.”
How do you reach investors without relying on your network?
A relevant introduction can make access easier, but cold outreach is also a valid path. Y Combinator’s guide recommends seeking introductions and, when they’re not available, sending a short, compelling summary to investors you’ve researched.
If you don’t have an introduction path, go ahead with direct outreach to well-matched investors. Waiting months for an introduction also has a cost when your cash position and the round’s timeline keep ticking.
The message needs to explain what you do, what evidence exists, and why you’re reaching out to that specific person. Close with the amount you’re seeking, the milestone it would fund, and a simple next step. Mentioning a fund’s portfolio only helps if it demonstrates fit; complimenting the fund on its latest announcement doesn’t.
If you ask for an introduction, provide text that can be forwarded without editing. And don’t turn an exploratory conversation into a commitment: interest, internal review, and an investment decision are different states.
How do you organize meetings and improve the pitch?
Work in batches of conversations clustered close together. That lets you compare objections and improve your materials while the process is still active. You can start with close contacts and exploratory conversations before reaching your priority investors.
That sequencing is useful, with one caveat: don’t treat a person as a throwaway meeting, and don’t postpone a good opportunity just to stick to the schedule.
After each meeting, note what they understood, what they questioned, and what evidence they asked for. Distinguish between an objection that keeps coming up and one investor’s isolated preference. You don’t need to rewrite the company after every conversation.
End with a concrete next step: another meeting, requested information, who decides, and by when. “Let’s stay in touch” doesn’t let you plan your cash flow.
This diagnostic framework for the process is our own operational proposal:
| Where the round is stalling | What to check first |
|---|---|
| Contacts aren’t responding | List fit, messaging, and access path |
| There are meetings, but no progress | Clarity of the business, thesis, and evidence |
| It reaches due diligence and stalls | Metrics, risks, documentation, and terms |
| Commitments aren’t closing | Pending approvals, signature, and wire transfer |
These explanations aren’t mutually exclusive. If an investor isn’t moving forward, their investment capacity may also have changed. Confirm the cause before you change strategy.
What documents do you need, and what terms should you review?
Prepare a deck that makes sense without a voiceover, a short summary, and a consistent cash model. The data room, the folder of documentation for evaluation, should bring together corporate records, the cap table, relevant contracts, backup for your metrics, and proof of intellectual property ownership. Adjust the depth to the stage, and share sensitive information as the process moves forward.
If putting these materials together reveals that your deck needs a deeper overhaul, we can work on its narrative, writing, and design within The Program. It’s a way to walk into conversations with a story and a presentation that reinforce each other.
The cap table shows who holds equity and which instruments could convert into shares. If you’ve already issued SAFEs or convertible notes, you can’t evaluate the founders’ percentage just by looking at current shares.
According to Y Combinator’s official SAFE documentation, a SAFE lets someone invest in exchange for rights to future shares and, in its standard form, carries no interest and has no maturity date. A convertible note is debt; an equity round sets a price and issues shares. The specific contract determines the effects.
In a simplified equity round, USD 1 million invested on a pre-money valuation of USD 4 million produces a post-money valuation of USD 5 million. The new investors get 20%, before accounting for convertibles or changes to the option pool.
With a post-money SAFE with a cap, the investment-to-cap ratio lets you estimate the stake sold under those assumptions. It doesn’t necessarily represent the final percentage after the future equity round. Model all the conversions and the new investment together.
Beyond valuation, review liquidation preferences, information rights, pro rata, corporate governance, and any conditions pending before funds are disbursed. A term sheet isn’t the same as available cash. For Latin American companies, documentation and tax consequences need to be reviewed with advisors in each jurisdiction involved.
What could change in 2027, and how should you prepare?
No valuation or process length can be guaranteed for 2027. Design the round so it stays defensible even if investor sentiment shifts.
With greater risk appetite, you might consider a larger amount if there’s a productive, justifiable use for it. With less capital available, prioritize the milestone you can reach with less cash. In either scenario, keep a backup plan in case the close gets delayed.
The real test is concrete: if the wire transfer arrives several months later than expected, which payments, hires, or milestones change? Recalculate your cash position and decide in advance when to activate the backup plan.
Preparation is done when you can explain what the capital will buy, show the evidence behind that bet, and run the process without losing sight of the operation.
Frequently asked questions about funding rounds
Can you raise money without revenue?
Yes. Y Combinator’s guide includes cases where the team and the opportunity are enough to secure funding before there’s any traction. That doesn’t eliminate the need for evidence: a science-based company can show technical validation; another can show understanding of the problem and early adoption. There’s no revenue threshold that applies to every company.
How long does it take to raise a round?
There’s no guaranteed timeline. Separate preparation, conversations, due diligence, and legal closing. Plan your cash position to withstand delays, and don’t count verbal commitments as available funds.
What percentage should you give up?
It depends on the amount, the valuation, and existing instruments. Compare the cap table before and after, including SAFE conversions, options, and new investment. The 20% example in this guide is just an arithmetic illustration; it’s not a recommended target for every startup.
Do you need a U.S. entity?
It’s not a universal requirement to receive investment. Check the fund’s mandate and whether the instrument is compatible with your jurisdiction before deciding on a reorganization. Y Combinator publishes forms for certain jurisdictions and recommends local legal advice for using them.
Is it worth using AI to prepare your pitch?
It can help organize your materials and rehearse questions. Every claim still needs to trace back to the company’s documents and data. Double-check market estimates and numbers especially: a generated answer doesn’t validate the opportunity.