What founders need to unlearn about fundraising and the one question no one thinks to ask investors
At SCALE Summit on 22 April, a panel of EIS and SEIS investors came together to share exactly what they look for, and where founders are missing a trick. Here are the takeaways for your next raise.
Fundraising is usually talked about as something you do when you need money, as if it’s a phase with a start and an end. But the investors assembled by the EISA on stage at SCALE Summit 2026 say founders need to unlearn that concept completely.
From the first conversation to the closing of a deal, from the speed networking session to an exchange email three years later, the investor relationship is always live. It’s the founders who treat it that way who get backed.
What investors really look for in founders
Jeffrey Faustin, managing partner of Jenson Ventures, explained what separates the founders his fund backs from the ones they don’t. Domain expertise matters, but it is not the deciding factor.
We really want to back founders that can listen,
We invest at a very early stage before product market fit is achieved, and you need founders that trust their gut. It never actually works the way you expect. The market will tell you what actually works, and you have to be able to listen to that.
Bernice Brooks, VC Associate at Guinness Ventures, emphasised the importance of honesty. Basically, “don’t lie”. It might sound obvious, but Bernice said it’s surprisingly common for founders to come into a conversation with a version of events that does not hold up when investors start doing their due diligence.
“Be open about the risks and communicate those risks. We all know there’s risk in building a business, and if you’re aware of those, it gives me confidence that you’ve planned and you’re prepared for what’s next,” she said.
Then Andrew Irwin of AI Venture Flows added a practical note that made some hearts sink and some bums squirm on their seats. The importance of founders understanding contracts. Not just the headline terms. Every. Tiny. Detail.
“The biggest issue I face is when we come to the contracts,” said Andrew.
“If the founder doesn’t have the skill set to understand contracts, understand accounts, understand Companies House and all the boring regulatory stuff, the whole thing can come crashing down and they have to bring in advisors to help. I’ve seen so many deals lost this way.”
Investor insight: Domain expertise opens the door. Honesty and the ability to listen to the market are what keep you in the room. The contract will be the thing that kicks you out.
You are always fundraising
Bernice’s advice was to start a year ahead, keep a pitch deck ready at all times, and treat every conversation as a potential introduction to someone who matters.
You’re always fundraising,
You don’t know who that person knows. They might introduce you to another investor. So you need to start early. Even exit planning starts a year, two years, before the exit. Always have a ready data room and pitch ready because you never know who you will run into.
Jeffrey confirmed that even at the faster end, founders should expect six to twelve weeks from first conversation to investment through Jenson Ventures, and sometimes longer. He also pointed out that a ‘no’ now is not always a ‘no’ forever.
“There are deals I said no to two years ago that I’m doing this year,” he told SCALE Summit. “Don’t ever be discouraged by a no. It might become a yes later. Keep that relationship warm. Keep putting yourself in front of that investor – not every week, just a quarterly update – so they’re tracking your journey.”
Andrew flagged a tension that not enough founders plan around: equity dilution. The temptation to raise a large amount early can leave founders with less than they expected when later rounds come in.
“Giving away 5% doesn’t seem that bad, but it can really come back to bite people very hard. It’s a tricky balance, because trying to do things organically can be very slow. But resist the temptation to go for a war chest early on. If you’re not careful, the founders’ stake ends up right down to below 30%,” said Andrew.
Investor insight: Build your pipeline before you need it, but protect your equity, and never treat a no as the end of a conversation.
What Series A investors want to see
Phoebe Kitchen, Principal at Molton Ventures, shared the question she and her colleagues return to most often when assessing a company.
“The core question that we often debate is ‘why now?’ for this particular pain point, and why is this the right approach to succeed,” she said.
Having a real crystal view on those two points is something that is going to get investors quite excited about your business.
Tom Haywood, Partner at 24 Haymarket, offered a simple instruction for the pitch itself.
“Lead with the problem,” he said. “Don’t tell me what you do. Tell me what problem you’re solving. And then tailor the message to the VC you’re talking to. If you’ve only got £400-£500K in revenue and the VC only invests in companies at a million plus, ask them for advice, not money. Look to build that relationship.”
Olly Norman from Love Ventures reinforced the point about fit. Approaching investors who are wrong for your stage or sector wastes time on both sides.
“Make sure you pick the right VC,” he said. “If you are a deep tech AI firm and we invest in fintech, consumer tech and proptech, we’re probably not for you. Throwing cash at it when we can’t actually bring anything to your company doesn’t really serve you or us.”
Aitian Li, from Calculus Capital, spoke about the four-year relationship her firm had built with one company before eventually investing. For me, this was one of the most supportive, encouraging and comments for founders to take away.
“We always welcome the conversation, even if the first touchpoint is not the right timing,” she said. “We’ll always encourage founders to keep in touch, and keep us updated. It’s also for them to get to know us during that time.”
Investor insight: Know your stage, know your sector fit, and know that a ‘no’ is OK. If it’s the right investor, that relationship is well worth nurturing.
The one question no one asks
The panel closed with a question about what founders should be asking investors during the speed networking, not just what investors would ask them.
The answer was to turn the conversation on its head and ask about failures. This has been a hot topic among the SCALE community, from the “expensive mistakes” Sir Richard Harpin shared in a fireside chat with our Chairman, and a recent SCALE Session with Bamboo Bamboo founder Joel Remy Parkes.
“Ask the investor what were some of the red flags they’ve seen other founders do, or what mistakes they’ve made when investing,” said Andrew.
Make it more conversational rather than transactional. Connect with that person.
Andrew also told founders at SCALE Summit that it’s OK to talk about exits from the very beginning. In fact, it’s important not to dance around this topic.
“If your investor wants to be out in two years, but your plan is to scale for five, that changes the direction of the business,” he said. “No one ever asks me what I need to get out of this as a deal. I will happily tell you if you ask me.”
Investor insight: Due diligence works both ways. Ask about exits, ask about returns, and ask what they have learned from the deals that did not go to plan.
SCALE has partnered with the Enterprise Investment Scheme Association to connect our community with EIS and SEIS funds investing at pre-seed stage, through to Series A, B and beyond.
This session, moderated by Christiana Stewart-Lockhart, Director General of the EIS Association, took place at London’s Business Design Centre. To meet EIS and SEIS investors at SCALE Summit in Manchester on 25 November, register for your pass now.