theBaseline
Most founders start with "how do I raise venture money?" That's the second question. This is the first.
There are many realistic ways to fund an early-stage company, and venture is the narrowest of them. It gets the most attention because it's the loudest, not because it fits the most businesses. It is increasingly perceived as an identity, a lifestyle to strive for and a signal of achievement. Where raising venture capital becomes more important than the business itself, let alone solving for customers’ problems.
Many founders reverse-engineer their companies to fit fundable theses, think Y Combinator’s Request for Startups. But the companies making the BIG headlines more often than not, have a more grand raison d’être.
What follows is a set of questions I'd ask if you sat down across from me, in roughly the order I'd ask them. Work through them honestly and you'll know which route you're on before you get to the end. I’ve included it as a downloadable form to make it more concrete.
To make this actionable, I’ve also productized it into the “Am I VC Fundable” app. Linked at the bottom, read through the questions first. Complete the assessment, and continue to the rest of the journey.
The open questions matter more than the multiple choice ones, and writing the answers down is what makes this work.
First, the honest one.
This is what most founders skip. Don't.
Why did you a start this company?
Do you want to be a venture backed founder, are you obsessed with solving a problem for your customers or perhaps both. There are no wrong answers, we all tick differently. Furthermore:
What do you want in ten years?
Not what sounds ambitious. What you want.
Running a company you own, profitable, forty people, good life? Selling for enough that you never work again? Building something that outlasts you?
And: how would you feel about someone else having a say in whether you sell?
Venture money commits you to a path to exit. Not eventually, not optionally, that's the deal. It commits you to raising again and again and again. It commits you to a board, to growth rates that will often feel unrealistic, and to the real possibility that a good outcome for you is a failure for them.
If the ten-year picture you wrote down is a profitable company you still control, venture is actively wrong for you. Not a bad fit. Wrong. And a lot of founders discover that in year three, which is an expensive time to find out. Since venture math usually means that any sales price under the amount raised will yield no money to the founders, only investors will get their money back.
Then to the filtering questions.
Second, the disqualifier.
“In a genuinely good outcome, not the best case, the realistic good case, what is this company worth?”
Write the number down before you read on.
If it's under €50m, you can stop worrying about venture capital entirely. Not because the business is bad, but because a fund that needs one company in twenty to return fifty times cannot use you. That's arithmetic, not judgment.
If you found yourself widening the market definition to make the number bigger, that's your answer too. The resistance is the signal.
If it's comfortably over €200m and you can explain why without stretching, keep reading. Venture is at least on the table.
Third, what does the money actually do?
Finish this sentence:
"With this money, we will do X, which we cannot do without it, and doing it faster changes the outcome because Y."
Write it out. Full sentence. This is also your pitch to investors, the funding is a means to the end. It is needed to finance a specific need which will increase the likelihood of a desired outcome.
If you can complete it cleanly, you have a capital need. The specific shape of X tells you which instrument fits:
Hiring ahead of revenue in a market where speed decides the winner:
→ venture or angel
Long R&D before there's anything to sell:
→ grants, then venture
Scaling something that already works and generates cash:
→ revenue-based financing or debt
Buying inventory or production capacity:
→ debt, supplier credit, pre-orders
If you couldn't finish the sentence, or it came out as "we'd move faster generally" or "we could hire more people," you don't have a capital need yet. You have an ambition. Those are different, and investors can tell the difference in about ninety seconds. The best position to raise from is when you don’t need it to survive but to accelerate and crush your competition.
Second question: what happens in eighteen months if you raise nothing?
Be specific. If the answer is "we grow slower but we're fine," you're in a much stronger position than you think, and probably shouldn't raise venture. If the answer is "we're dead," check whether that's a capital problem or a business model problem. Capital doesn't fix the second one.
Fourth, how capital-hungry is this actually?
Three questions, quickly:
How long from now until someone pays you?
Already happening, months, or years?
What does it cost to serve one more customer?
Near zero, or meaningful every time?
Can this grow without proportional headcount?
Software with paying customers and near-zero marginal cost sits at one end.
Deep tech with a five-year development cycle sits at the other.
Services businesses sit somewhere that venture generally can't reach, because growth requires people and people cost money forever.
The further you sit toward long timelines and high capital intensity, the more grants matter and the less venture works on its own as a starting point. Venture capital moves off of perceived potential, existing traction is a great way to signal that early. The further toward fast revenue and low marginal cost, the more options you have, including the option of not raising at all. Which can often be the best one.
Fifth, the team question
If you were an investor looking at your founding team from the outside, what's the thing you'd worry about?
Write it down. Don't defend it, just name it.
Nearly everyone has an answer, and the honest answer is usually right. First-time founder. Nobody who's sold into this segment. Solo. Technical team with no commercial experience. Domain expert who's never shipped.
The most common untold reason for an investor to pass on a company is the team, we’ll cover this in a separate section later.
This doesn't disqualify you from venture. But it tells you whether you're ready now or need six months to close the gap, and it's the thing that will decide your round whether anyone says so or not.
“Am I VC Fundable” app.
Click the image to figure out.
So which route are you on?
Read these and find yourself. Most founders land clearly in one.
Route 1: Venture
Your number was over €200m without stretching. You completed the capital sentence cleanly. Fast revenue, low marginal cost, or a market where speed decides. You want an exit and you're fine with the commitments. The team gap is small or closable.
This is roughly one founder in six who reads this page. If it's you, the rest of thePlaybook is built for exactly this, and the next lesson explains what raising well actually looks like.
Route 2: Angel first
The number works but the evidence doesn't yet. Real capital need, small — €100k to €500k. Team gap that a good angel could partly fill.
Angels move faster, ask less, and a well-chosen one who knows your market is worth more than a fund partner with twelve other boards. This is often the right first step toward Route 1 rather than an alternative to it. Same equity questions apply, smaller and friendlier.
Route 3: Grants, then decide
Long development cycle. Years before revenue. Deep tech, climate, health, hardware, anything R&D-heavy.
Europe's genuine structural advantage. EIC Accelerator, Horizon Europe, national programs across most member states. Non-dilutive, sometimes substantial, and slow enough that you need to start before you need the money. Many venture-fundable deep tech companies fund their first three years entirely this way and raise from a far stronger position afterwards.
Route 4: Revenue-based or debt
Predictable recurring revenue, some months of history. Growth capital rather than survival capital. You'd rather not dilute.
You borrow, repay as a percentage of revenue, keep all your equity and all your control. The effective cost of capital is high, so this works for accelerating something that already works, not for finding out whether it works.
Route 5: Don't raise
You couldn't complete the capital sentence. Or the eighteen-month answer was "slower but fine." Or the ten-year picture is a company you own.
This is the route nobody writes about and a lot of founders should be on. Revenue is the only funding source that doesn't dilute you, doesn't come with a board seat, and validates the thing everyone else is guessing at. If you can get to escape velocity on your own engine, the leverage that gives you later is enormous — including if you eventually decide to raise after all.
If you're between two routes
Common, and usually fine. The combinations that work:
Grant covering R&D, angel round for commercial hires. Revenue funding operations, venture debt bridging to a round. Pre-orders paying for production, bootstrap after.
The goal is reaching the point where raising is a choice rather than a necessity. Every non-dilutive euro before that point makes the eventual round smaller, better-priced, or unnecessary.
What to do next
If you're on Route 1:
Continue to the next lesson. Then the full playbook, which is built for exactly this.
If you're on Routes 2 through 5:
the capital map lists every source in each category — VCs, angels, family offices, grant programmes, RBF providers, accelerators — filterable by stage, cheque size, sector, and whether it dilutes you. It's free and it's the most useful thing on this site.
If you're not sure, or you think I've got it wrong:
that's a legitimate conversation and often a thirty-minute one. I'd rather tell you venture is wrong for you now than have you find out in year three.
