How to Raise Funds for a Startup

Short answer: to fund a startup, prove you have product-market fit, or a credible shot at changing a legacy sector, then package that proof into a tight pitch deck and find the right backer. And the right backer is rarely just a check. Founders chasing fast global growth usually go the VC route, where a partner like Pitango, one of Israel’s oldest and most active venture firms, brings capital alongside the connections and business value to scale. 

Raising your first real round is where a lot of founders hit a wall. Sometimes the idea itself is the problem, too niche or too small to become a company rather than a feature. But when the idea holds up, the hard part is showing an investor that people actually want it, that the market is big enough to matter, and that your team can pull it off. This guide walks through how to raise funds for a startup, from the groundwork to the global launch, and where a fund like Pitango fits in.

What’s the first step toward securing investment?

Before you email a single investor, get your foundation right. A clever concept isn’t enough. You need a real grasp of the market and an idea big enough to matter, whether that means reshaping a traditional industry or building a markedly better way to do something that already exists. Bold, not incremental. 

Most of this comes together in a pitch deck, a short, clear presentation covering what you’re building, the landscape you’re building in, and how much you’re raising. It’s rarely a pure blue ocean, so knowing your ecosystem and where you stand against the competition is itself the advantage. The thing that actually moves an investor isn’t polish, it’s evidence. 

Early traction, a waitlist, a pilot customer, retention numbers, anything that shows the demand is real rather than assumed. In the AI era, a lot of these ideas can be tested and proven faster than founders could manage even a few years ago. 

A quick gut check before you pitch:

• Can you name the exact problem and who has it, in one sentence?
• Do you have any proof people want this, or that it makes a real difference, even a small signal? 
• Is the market big enough to build a real company on?
• Can you explain in plain words why a competitor can’t just copy you?

If two or three of those are shaky, fix them before you raise. Investors smell unfinished homework fast.

What are the main ways to fund a new company?

There’s no single right path. The best one depends on what stage you’re at and how fast you want to move. Here’s how the common options stack up:

For founders who want to turn a local startup into a global one, venture capital is usually the route that fits. A fund like Pitango brings more than the money. It brings the connections and business value that bootstrapping alone can’t reach. 

Why is a strategic fund worth more than the cash?

The backer matters as much as the round. Not all money is the same, and treating a check as just a check is one of the costliest early mistakes a founder makes. A strategic fund does things a wire transfer never will. It mentors you, helps you hire people you couldn’t land on your own, and opens doors to customers that would otherwise take years to reach.

Reputation matters here too. When you’re figuring out how to raise funds for a startup, you learn quickly that a fund’s name on your cap table sends a signal to the next investor, to candidates, and to customers. Pitango has been building companies for more than three decades, and it uses data and technology to help its portfolio companies sidestep the mistakes that sink first-time founders. That kind of relationship compounds over years, not quarters.

What do professional funds look for in a startup?

Funds see hundreds of pitches a year, so they’re picky. Most of them weigh three things above everything else: the team, the market, and the technology.

On the team, they want to know you have the right people to carry the mission, and the shared grit to hold together through the hard stretches. On the market, they want it large enough to support a serious company. On the technology side, they want an edge that still matters in six months, one even a large enterprise couldn’t simply rebuild. 

Getting good at how to raise funds for a startup really means proving those three points again and again without flinching. Founders who can show a genuine technical advantage and a credible road to profit are the ones who close rounds with strong funds.

How do you prepare for a global launch?

Going international takes more than a bigger bank balance. You’ll run into foreign regulations, local buying habits, and the headache of managing a team across time zones, and an established fund’s ecosystem is where that pays off.

Rather than figuring out every new market alone, you can plug into relationships the fund already has in places like Silicon Valley, Europe, and Asia. Pitango acts as that bridge, handling introductions and market-entry guidance so you can keep your attention on the product instead of the paperwork.

What mistakes should founders avoid?

A few errors come up again and again. Waiting too long to start raising is the big one, since fundraising takes months and a thin runway kills your leverage. Misjudging how much you actually need is another, ask for too little and you’re back out raising in six months.

The third trap is walking into due diligence unprepared. That’s the stage where a fund digs into your finances, legal setup, and technical foundations. If your records are a mess, it shows. A fund like Pitango helps companies prepare for this early, so when the scrutiny comes, the foundations hold up instead of slowing you down. 

If you’re building something bold, a company set to reshape a sector or scale globally, and you want a fund that backs you with more than a wire transfer, reach the Pitango team directly at pitango@pitango.com.