Fundraising from whom and how Much?

This week we had our second Women Founders Investment Readiness session: Fundraising From Whom and How Much?

Working with Gurbeen, one of the best learning moments for me has been taking it back to the basics. We often get so caught up and laser focused on our own work, challenges, and what we’re building, that we forget fundraising looks different depending on the type of business you have.

We broke fundraising down into five areas: investments, loans, grants, sales, and sponsorship.

One thing I really value about Gurbeen is her work ethic and her focus on building a business that actually works. That means focusing on sales. Her metaphor of the bicycle where there are two wheels always turning in your business is a great visual, purpose that drives the sales.

Everytime I speak with my co-founder, Mustefa, also recommends that sales should come first. He always recommends entrepreneurs build a successful business where they can earn their livelihood through making sales.

“You have to build something real. It’s very inexpensive to build a startup today. What used to cost $500,000 can now be covered with $5,000,” he says. But he also says that it is totally normal for some businesses to require upfront capital. Those types of businesses can lean on institutional contracts and grants, in addition to financing and possible fundraising.

“What holds most founders back is giving away equity as a payday, so you don’t actually have to build a business, and that’s why 95% of startups fail.”

The harsh reality is that most founders start off wanting funding to fund their business idea. But how are we getting a business off the ground while thinking creatively and outside the box? Why spend heavily on marketing when the product itself hasn’t been solidified yet?

Sales should always be the core focus in building a business. Revenue validates demand, and creates independence as an entrepreneur. it also strengthens your position in many different conversations. Founders then can explore grants to support innovation or programming, loans for businesses with steady cash flow, and other investment opportunities.

When we launched Parkdale Centre back in 2018, we had no funding. Our first fundraising round came from family. I don’t recommend this to everyone, because money and family or friends can make things uncomfortable quickly.

We also leveraged a $20,000 microfinancing loan from Alterna Savings. Before we were able to access that loan, we had to prove we were making sales. How did we do that as a nonprofit?

We started selling memberships at $149/month for entrepreneurs looking to access our co-working space and programming. It worked. We started hitting close to $10,000 in monthly sales through memberships alone! Can you believe that? I actually didn’t. It felt like such a big accomploishment at the time, and I still think of it to this day.

As a result, when I later applied for FedDev funding, showing sales, traction, and proof that we had already leveraged loans to generate more revenue made our application much stronger. Then government funding came through, and that became a whole new chapter with its own challenges and shifts in business model. I’ll leave that story for another time 🙂

Choosing who to raise from comes down to alignment. The type of capital you pursue should reflect your business model, your stage, and your goals. A company still validating its product will require a very different approach than one that is ready to scale.

One of the biggest mistakes founders make is taking money from the wrong source, which can lead to misaligned expectations and a lot of unnecessary stress.

Founders should calculate their monthly burn rate, map out the next milestone, and plan for about six months of runway with some buffer built in. The goal is not to raise as much money as possible. The goal is to raise enough to reach the next meaningful stage of growth.

I know many advisors and experts recommend planning for 12 to 18 months of runway, but from my experience building three businesses, that can feel unrealistic for many first-time founders.

For first-time founders especially, expectations need to be realistic. Early funding often starts with smaller cheques from friends, family, and angel investors, and builds over time through traction and relationships. It takes persistence, clarity, and a lot of trial and error.

Don’t be afraid to pivot when something isn’t working. Take the time you need to figure out how to make it work better.

Don’t move so fast that you’re breaking things, but move fast enough that you can adapt and keep momentum going.