I’ve been working with a growing number of founders raising capital, and after seeing enough decks, one pattern is painfully clear:too many founders are raising equity to fund working capital problems.Raising equity capital for “inventory” or “marketing” is a race to the bottom.Here’s why:If you have real sales velocity, your inventory should turn over.
That means your working capital should recycle. The equity you gave away to fund it never will.If you actually understand customer acquisition, you know that your marketing spend should be a repeatable process driven by CAC:LTV.If you don’t know those numbers or don’t have a plan to improve them, labeling a big chunk of your raise “Marketing” just tells investors: “I’m guessing.”And no investor wants to write a check for you to hand it over to Meta for “testing.”So what do you do instead?👉 Start smaller.
Run micro-tests. Prove conversion. Understand what each customer is worth and how to bring them back again and again. 👉 Build repeatability. Your model should show that one customer pays you enough to acquire two more.👉 Negotiate smarter. If inventory is your constraint, work with suppliers. Show them your sales velocity and negotiate longer terms.
Build confidence before you build inventory.Fundraising isn’t about plugging gaps with capital. It’s about showing investors that you’ve built a system that fuels its own growth where they can clearly see their ROI. If you’re stuck in this valley… I get it. I’ve been there.It’s exactly what we work on every week at InPaceline and in The Founders Round.Comment “LTV” below and let’s break through it together.
