December is nuclear winter for startups raising capital.

Conventional wisdom suggests that starting a fundraising process in October, November, or December is futile at best and could be potentially detrimental. Despite this well known fact you’d be surprised by how many entrepreneurs reach out to me during the holidays asking for introductions to investors.

Rosh Hashanah marks the start of nuclear winter for fundraising. Followed shortly after by Yom Kippur, Sukkot, Shemini Atzeret Simch at Torah, Thanksgiving, Hanukkah, Christmas, and New Years. Between October and January you’re more likely to run into an investor in Aspen, Jackson Hole, or Boca Raton than in Menlo Park.

Fundraising is a momentum game. If you start the process during the holidays, maintaining momentum will be impossible. Think about it. Your first meeting with an investor goes really well and he decides to dig in. Despite the best of intentions he will invariably get pulled away by holidays and vacations. By the time he gets back to the office in January your deal will seem a little stale. Investors love to get an early look at a startup so they can scoop it up before their competitors have a chance to even see it. In this case the investor will assume that you’ve had months to shop the deal and everyone who has seen it passed — he doesn’t want to get in a deal that everyone else passed on. Any chance of raising money from the investor are gone.

So word to the wise, it is a HUGE mistake to start the fundraising process during the holidays. Save yourself some grief and wait until the new year. Oh, and don’t even bother asking me for an investor referral until January 6th…



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