Raising $250 million in a Series D round may seem like a distant and unnecessary distraction for startup founders pitching their first $1 million in seed money to investors. But that shouldn't be the case, according to some founders and venture capitalists. In their view, founders need to develop a strategy for late-stage funding from the beginning.
Aven co-founder and CEO Sadi Khan said on stage at TechCrunch Disrupt that startup founders should start thinking about subsequent rounds before raising their first round of funding. This strategy allows founders to determine the amount of capital they will need throughout their startup's growth.
“We are a very capital-intensive company. We provide consumers with asset-backed credit cards,” Khan said. “It takes a lot of capital to scale, and even more capital to grow. We knew from the ground up that we needed a focused pipeline of investors who wanted to work with us for the long term.”
Founders who understand how much capital they need can focus on finding the right investors for early-stage rounds while building relationships with like-minded later-stage investors.
Laila Preston, head of growth equity at Generation Investment Management, said startups should start building these relationships at least two years before they need capital.
Starting these relationships early gives investors time to learn about the business and the markets it operates in, Preston added. It also gives investors a glimpse into the company's growth.
Preston said some later-stage investors like Generation Investment Management can add value to a company long before they invest if they think the idea is promising.
tech crunch event
San Francisco | October 13-15, 2026
“When I go into a series, whether it’s Series A or B, I do my homework to make sure it’s a value-added conversation,” Preston said. “'What are your milestones?' 'What does success look like to you?' As an entrepreneur, [if you are] If you can articulate that, you can come back and say, “Yes, we achieved the milestones we set.” ”
Zeya Yan, a partner at IVP, agreed, adding that late-stage rounds are closing faster than in the past. Giving investors time to learn about the company in advance is beneficial for both parties, Yang noted.
“It definitely helps to get to know those people sooner than you think you need to,” Yang says. “When you're actually raising money, you're talking to people you're comfortable with, and two people who are already thinking a little bit about their business. So thinking ahead of time definitely helps.”
Yang added that when early-stage companies begin conversations with later-stage investors, they don't necessarily need to share all the numbers and metrics just yet. Instead, you can share the overall direction of your company and your overall vision of what your company is building.
Startups looking to find these late-stage investors should start by looking at existing cap tables, Khan said. A company's existing investors can connect founders with other venture capitalists. Early investors introduced him to Khosla Ventures, which led the company's Series E round. It may be a good fit or it may have worked well for investors at the cap table in the past.
“At every stage of fundraising, we were always thinking about who our next investor would be,” Khan said. “We try to build relationships in previous rounds with investors who are seriously focused on the next stage round, and sometimes we bring them on board, like a symbolic check, to really start establishing the relationship.”