Do You Actually Need to Fundraise?

Before you start looking for investors, ask yourself what their money would change—and whether you want everything that comes with it.

Another founder announces a funding round. The congratulations roll in. Their team photo appears in your feed, alongside a number with enough zeros to make you pause.

You’re happy for them. But perhaps a small part of you wonders: Should we be raising, too? Are we falling behind?

It’s an understandable reaction. Fundraising is a very public milestone. The quieter achievements—customers renewing, margins improving, a business finally paying its own bills—rarely receive the same attention.

Before you let someone else’s announcement set your agenda, though, I’d ask you this:

If nobody ever found out that you had raised money, would you still want to do it?

That question helps separate the business need from the perfectly human desire for validation. Building something is hard. Having an investor believe in you can feel like confirmation that you’re on the right track. But once the congratulations fade, you still have to build the business. And now you have someone else’s expectations to manage, too.

Through my work at Lucidity Insights and conversations on our podcast The Perfect Pitch, where I sit down with the Middle East & Africa’s most active venture capitalists to decode the regional fundraising apparatus, I spend a great deal of time exploring what makes a business investable. The question I want founders to consider first is whether investment serves the business they actually want to build.

What would the money allow you to do?

Let’s say your answer is: “Hire a sales team.”

Fair enough. But why a sales team, and why now? Have you found customers who buy, stay, and recommend you? Are opportunities slipping away because you cannot respond quickly enough? Or are you hoping more salespeople will work out why customers aren’t buying?

Those answers lead to very different spending decisions.

In my reporting on Egypt’s startup ecosystem, Algebra Ventures’ Tarek Assaad described businesses that had poured funding into customer acquisition, only to discover that the growth was unsustainable when capital became scarce. He contrasted them with more disciplined companies that had invested in technology and retained customers. It is a useful reminder to examine what sits underneath the growth.

Imagine spending six months and an investor’s money to acquire customers who leave after their first purchase. Would a smaller experiment have revealed the problem earlier?

Before deciding how much you need, finish this sentence: “With this money, we will be able to demonstrate…”

Make the answer something you can observe. Customers renewing. A working prototype passing a technical test. A production process becoming commercially viable.

Now you have something worth budgeting for.

What could you prove before asking someone else to take the risk on you and your business?

This is where a little creativity can change your position.

Could a customer pay for a pilot? Could you deliver part of the service manually before building the entire platform? Could you test demand in one neighbourhood before launching across a country?

Picture a founder planning to build software that helps restaurants reduce waste. Before commissioning a full product, could they work with three restaurants, analyse the problem, and charge for a basic service? That small test could reveal what owners value, what information they will share, and whether the savings justify the price.

It would also give the founder something much more concrete to discuss with investors.

Of course, you cannot manually improvise your way through every business. Medical devices, advanced manufacturing, and other technically demanding ventures may require substantial funding before commercial revenue is possible. The useful question is: What is the smallest credible test for this particular business, and what does it genuinely cost?

Resourcefulness can strengthen your case, though it cannot guarantee funding.

Next: Would you enjoy running the business your investor needs you to build?

Stay with this question for a moment.

Imagine that your company becomes profitable, supports a good team, serves customers well, and gives you a life you enjoy. Would you feel successful?

Now imagine an investor expects you to reinvest those profits, enter several new markets, raise again, and pursue a much larger outcome. Would that excite you? Or would it pull you away from the reason you started?

Venture investors need opportunities capable of producing significant returns for their funds. They aren’t just looking for “solid businesses” where there are consistent returns, but plateau at a certain size. Venture investors are looking for the next unicorn - a company that will grow until they reach that billion dollar valuation, or at least has the potential to get half way there. That often means growing globally, launching many offices, going beyond your local and regional market. That creates expectations about growth and eventual liquidity that deserve an honest conversation.

Ask how a prospective investor expects to make money, over what timeframe, and what happens if the business grows more slowly than planned. Discuss these questions with your co-founders, too.

An angel investor may offer different terms or expectations, but don’t assume that the label means patient capital or modest return requirements. Find out.

Could a different kind of funding solve the problem?

If equipment is the constraint, investigate equipment finance. If the issue is the gap between delivering work and collecting payment, explore suitable working-capital options. If you are developing something eligible for a grant, understand when the money arrives and what obligations it creates.

The basic trade-off matters: equity changes ownership; borrowing creates repayment obligations. The right choice depends on your business, cash flows, and the actual terms available.

Ask what happens if the plan takes longer. A financing option that looks affordable in your best month may feel very different in your worst.

So, what should you do next?

Before opening your pitch deck, write one honest paragraph:

We need this capital to achieve the following quantifiable milestones: ____.
We have already demonstrated ____.
Without investment, we can still ____.
We are willing to accept ____ in exchange for the opportunity to grow faster.

Where you struggle to finish a sentence is where your next piece of work begins.

This is also why I recommend my conversation with Sonia Weymuller of VentureSouq on The Perfect Pitch, which explores when to fundraise and what to look for in the investors you bring into your business.

If you need help identifying preparation gaps, take Lucidity Insights’ Fundraising Readiness Test (here). Use the result alongside your cash forecast and capital decision. But remember, a strong readiness score does not, by itself, mean you need to raise; it simply means that you’re ready to, if you decide to do so. More often than not, it pays to bootstrap and refine the business further. When you have a clear goal of where you need to get to and how much capital you need to achieve the various milestones along the way, that’s when you should seriously consider fundraising.

You can be ready to raise and still decide to wait.

Give yourself permission to make that decision. The next milestone should be one your business needs.