Fundraising Timing: You Need Money to Raise Money
The world is paradoxical: you can only raise money when you already have money. Keep enough cash in the bank, start fundraising when you've spent half, and let investors come to you. Then understand the VC's ledger — once you see why wanting 10x isn't greed, you'll know exactly when and how to talk money.
Keep Enough Cash in the Bank
When you're not desperate for money, fundraising becomes easy. Professional VCs and PE firms need to deploy capital — it's their job, and they're constantly hunting for opportunities to make money. So let them come to you; it's far easier than chasing them.
Start Fundraising When You've Spent Half
If you raised ¥1M in your first round, start your next round once you've spent ¥500K. Never let it run out — "once the money's gone, you're done." When your bank account is empty, fundraising is at its most painful: if they don't give you money tomorrow, you're dead the day after. What leverage do you have left?
Closed $4 Billion in Four Hours
Xiaomi's previous round valued the company at $1B and raised $90M. Just five months later, investors were knocking on the door. "Do you need funding?" Not really. "When's your next round?" Maybe at year-end. "What's the valuation?" $4B minimum. "I'll give you $4B today — deal or no deal?" When your business is proven and you're not short on cash, negotiations can be that relaxed.
Express Confidence Humbly
During discussions and negotiations, knowing how to project confidence while remaining approachable and collaborative is critical. Your leverage comes from your business and your cash, not from the volume of your voice.
Assume you raised ¥1M in your first round. Drag the slider to simulate how much you've spent, and watch how your negotiating leverage tracks with your remaining cash.
Cash in Bank
Remaining ¥1MWanting 10x returns on a single investment sounds greedy. But Lei Jun ran the numbers for VCs: they invest in startups, and 80–90% of them die. Invest in ten companies, the one winner returns 10x, the other nine fail completely — you've barely broken even. And from founding to IPO to actually selling shares, it takes an average of at least eight to ten years. The game rule is "winners make 10x, losers lose everything" — and precisely because of this structure, they're willing to take the risk, which provides an enormous boost to innovation at a national level.
A fund invests in 10 companies, 1 share of capital each. 9 of them fail; only 1 survives. Drag the slider to set the return multiple of the surviving company and see whether the fund ends up in the red or black.
What VCs most want to know is how you'll help them make 10x — especially early-stage Series A VCs. You need to walk them through the math so they believe it, and so they can go back and convince their investment committee. One non-negotiable: you can lose money, but you can't lose character. Even if the company fails, maintain the relationship with your investors. They don't think losing money is shameful — they do it every day. What matters most is that they trust you as a person.
Lei Jun heard this kind of story almost every day: "My goal is to build smartphones, but before that, I need to build feature phones first." He'd always ask: why not just build smartphones directly? The answer: too competitive, needs too much money. But today's capital markets are not short on money — investors worldwide are frantically hunting for opportunities, and at the first sign of one, money floods in like water. What's scarce is people who can help them make money.
"I'll build feature phones first, then smartphones."
What investors hear: you don't even believe in your own goal. The roundabout path costs time and confidence. When you can't secure resources, the question to ask is what you can offer in exchange — not how to downgrade your goal.
"I'm going to build smartphones."
Investors don't care what you're worth today — they care whether you can make them 2x, 3x, or 5x in the coming years. Xiaomi was valued at $4B just two years in and raised $216M. After two months of due diligence, the investors said just one thing: "There is no external factor preventing you from becoming the next $100B company." If you don't get there, that's on you.
For a one-person company, your "cash in the bank" is your runway: subscription revenue plus savings. "Start at half-spent" translates to: when your savings plus monthly income can only sustain you for six months, it's time to open new revenue lines, negotiate sponsorships, and take on consulting work.
Don't wait until you're starving to look for work: by then you have no confidence in any deal you take, and your rates will get cut in half. Lei Jun's description of a founder with no leverage — "if they don't give you money tomorrow, you're dead the day after" — applies equally to an independent developer facing a client.
The solo-founder version of "let investors come to you" is: let opportunities come to you. When your product metrics are strong and your public build process generates steady buzz, sponsors and clients will come knocking — and you'll be in a much stronger position to negotiate.
When negotiating, remember the VC ledger logic: the other side doesn't want to hear how much you need the money — they want to know how you'll help them make money. Sponsors are buying conversions; clients are buying time saved. Walk them through that math, and it's more effective than any plea.
"The secret to raising money is having money in the first place." Start fundraising when you've spent half — never wait until it runs out.
Let investors come to you: focus on building a great business, and express your confidence humbly when negotiating.
Understand the VC's ledger: the 10x return requirement is driven by nine-out-of-ten failure rates — walk them through how you'll help them make money.
State your goal directly: capital isn't scarce — what's scarce is people who can help it grow.
Source: Compiled from Lei Jun's public startup masterclass talks