Business Funding: How to Start Fundraising

Learn everything you need to know about business funding, from the types of investors and funding rounds to alternative fundraising options and the right time to begin the process. With the right fundraising and due diligence support, along with strong accounting services, startups and SMEs can position themselves for a smoother, faster, and more successful capital raise.

Fundraising can supercharge your business growth, but knowing when to start the process is critical. Raising funds is more than pitching your idea and receiving capital; it requires careful planning, strong financial hygiene, and a clear understanding of your company’s goals.

Each time you accept money from investors, you give up a portion of ownership in your business. This equity dilution reduces your share in a future exit and invites outside perspectives into your decision-making. Investors are not just financial backers; they can influence marketing, hiring, and even product development, especially if they hold a seat on your board.

At PikoHANA, we have supported businesses and SMEs across Singapore, Hong Kong, Australia, and the wider Asia-Pacific region with services like fundraising and due diligence support, CFO services, and accounting services. This guide will walk you through everything you need to know to prepare your business for a successful raise while maintaining operational control and long-term growth potential.

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Fundraising 101: How to Get Funding for a Business

Before diving into strategy, it is essential to understand the basic fundraising terms and concepts, from the types of investors to the different ways you can raise capital. According to the Small Business Finance Insights report, over 82% of businesses fail due to cash flow issues, highlighting why choosing the right funding source and timing is crucial for long-term growth.

Types of Investors

Capital can come from a wide range of sources, but these are the most common for small and medium-sized businesses in Singapore, Hong Kong, and across Asia-Pacific:

Angel Investors

These are individuals who invest their own money in private companies, often in the early stages. In Q2 2024, AI startups received $24 billion, which accounted for about 30% of all venture dollars invested in that quarter (Crunchbase), making it an attractive option for businesses just starting.

Venture Capital (VC) Firms

VC firms pool capital from limited partners to invest in high-growth businesses. In 2024, Asia-Pacific VC funding hit $80 billion, with Singapore continuing to lead the region as a hub for innovation (KPMG).

Institutional Investors

Institutional investors, such as large asset managers, banks, or family offices, often back growth-stage or pre-IPO companies. Firms like Fidelity and T. Rowe Price are prominent examples. These investors are typically more selective, but they provide significant capital for scaling operations.

Accelerators and Incubators

Programs such as Y Combinator or Antler provide mentorship, operational support, and seed capital in exchange for equity. Singapore’s accelerator ecosystem alone supported over 500 startups in 2024 (Enterprise Singapore), showing its role as a launchpad for regional growth.

Bootstrapping

Some businesses choose to fund operations through personal savings, early revenue, or cost-efficient resources, avoiding dilution entirely. While slower, this method allows founders to retain full control while building sustainable operations.

Types of Business Funding

Your funding options will vary depending on which stage your business is in. Most companies aim to raise enough capital to maintain a cash runway until their next round of funding. According to Crunchbase, the average wait time between rounds grew to 24–30 months in 2023, meaning businesses often need to raise more capital upfront to sustain operations until the next milestone.

Typical fundraising options for founders include:

Convertibles

At the seed stage, many businesses choose convertible securities such as SAFEs or convertible notes. This method is faster and less complex than executing a full equity financing. PikoHANA’s fundraising and due diligence support helps businesses structure these early rounds cleanly, ensuring investor confidence.

Priced Rounds

When raising a Series A or later round, businesses issue preferred stock at a negotiated valuation. This is known as a priced round. Most investors at this stage prefer direct equity ownership, including specific rights and preferences. Businesses preparing for priced rounds often rely on CFO services and accounting services to align financial models and maintain accurate reporting.

The types of funding structures above can also have variations based on terms and conditions:

• Down Round: When a company raises a round at a lower valuation than the previous round.
• Up Round: When the new valuation is higher than the prior round, it signals growth and investor confidence.
• Tranching Financing: Investors release funds in stages tied to performance milestones rather than one lump sum.
• Bridge Round: Extra funding raised between priced rounds to extend the runway while preparing for a larger raise.

→ Learn more about valuations and funding stages in our blog on preparing for growth and fundraising.

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Alternative Fundraising Options

There are several ways to fund your business beyond traditional equity rounds. Exploring these alternatives can help maintain control while still securing the capital needed to scale.

Venture Debt

Venture debt is a bank loan designed for businesses between venture capital funding rounds, allowing you to extend your runway with less equity dilution. According to SVB’s 2024 Venture Debt Report, this market surpassed $30 billion globally, making it a viable option for growing businesses that need non-dilutive capital. Partnering with experts like PikoHANA for CFO services ensures your financials and repayment plans are investor-ready.

Equity Crowdfunding

Equity crowdfunding pools smaller contributions from a large group of investors, often through online platforms. This approach can help startups and SMEs raise awareness while securing funding. Global equity crowdfunding volume grew to $17 billion in 2024 (Statista), signalling its increasing relevance, especially in regions like Singapore and Hong Kong, where regulatory frameworks are business-friendly.

Other Sources

Some businesses may qualify for public or private small business loans, government grants, or business credit programs that offer longer repayment terms. In Singapore, for example, the Enterprise Development Grant supports qualifying SMEs in scaling internationally. For businesses managing multiple jurisdictions, PikoHANA’s corporate services and accounting services can help navigate compliance and reporting obligations tied to such funding.

→ Learn more about scaling your business globally

Rounds of Funding

Once you understand the basics of business fundraising, it is time to explore the different stages of priced rounds commonly referred to as “funding rounds.” Each round serves a specific purpose in your business growth strategy and requires a different approach to investor readiness and financial preparation.

Pre-Seed Round

If you have identified a market opportunity, built a minimum viable product (MVP), or developed a prototype, your business is likely in the pre-seed stage. At this phase, investors are betting primarily on the founder’s vision and the market potential, rather than proven product-market fit.

According to Dealroom, global pre-seed investment exceeded $12 billion in 2024, highlighting the competitive nature of this early round. Many founders at this stage also choose to bootstrap funding operations with personal savings or early revenue to validate their idea before raising external capital.

Common sources of pre-seed funding include:

Angel Investors

High-net-worth individuals, known as angel investors, provide early capital in exchange for equity or future rights to equity. While the investor is typically an individual, the investment may be made through an LLC, trust, or fund. Angel investors contributed over $24 billion globally in 2023 (Crunchbase), often helping businesses take their first crucial steps.

Syndicates

A syndicate is a group of investors pooling capital through a special purpose vehicle (SPV) to invest in a company collectively. This allows businesses to raise larger checks while dealing with a single legal entity.

Friends and Family

Many early-stage businesses rely on friends and family networks for their first injection of capital, though these rounds typically depend on personal connections and available liquidity.

Bootstrapping

Some founders opt to self-fund their early operations, often by using personal savings or reinvesting early revenue. This approach avoids early dilution and keeps operational control firmly in the founder’s hands.

Accelerators and Incubators

Accelerators and incubators provide mentorship, resources, and funding in exchange for equity, typically between 3% and 7%. Programs like Singapore’s StartupX or Hong Kong’s Betatron have become key players in the Asia-Pacific innovation ecosystem, with acceptance rates often in the low single digits. Businesses in these programs gain access to a cohort community, exclusive events, and investor introductions, usually receiving $50,000–$150,000 in seed capital.

→ Learn more about scaling with the proper financial foundation.

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Pitch Competitions

Competitions offer a chance to secure non-dilutive funding while gaining visibility with potential investors. Even without winning, the exposure and feedback can create valuable connections.

Micro and Pre-Seed Funds

Micro venture capital firms focus on smaller checks, often under $500,000, for businesses that have yet to achieve significant traction. These funds provide not only capital but also strategic advice and early market validation.

At every stage of fundraising, having clean books and a clear financial story is critical. PikoHANA’s fundraising and due diligence support and CFO services help businesses build investor-ready models, reconcile multi-entity accounts across Singapore, Hong Kong, and the wider APAC region, and create structured data rooms that accelerate due diligence.

Seed Round

The seed round is often the first significant funding stage for a business. By this point, you likely have a working product demo and are moving toward a market-ready MVP with beta testing. Seed funding helps companies to refine their products, validate market fit, and build an early team to support operations.

According to Carta, the median seed round in 2023 was $3.1 million, highlighting how capital-intensive this stage can be. Typical investors at this point include angel investors, seed-focused venture capital firms, and fundraising syndicates.

Funding options at the seed stage include:

Equity Crowdfunding

Equity crowdfunding platforms like WeFunder, Republic, and SeedInvest enable broad groups of investors to purchase partial ownership in your business. Global equity crowdfunding volumes grew to $17 billion in 2024 (Statista), making this an increasingly popular alternative for early-stage founders.

Multi-Stage Funds

Some VC firms operate multi-stage funds, offering seed capital for proof-of-concept development and follow-on funding in later rounds. This can create consistency in support as your business scales.

Convertible Securities

Many seed-stage businesses raise through convertible securities like SAFEs or convertible notes, allowing them to access capital without negotiating a formal valuation until the next priced round. These instruments convert to equity automatically during Series A or beyond.

Series A

By the time a business is ready for a Series A, it typically has a market-ready product, proven product-market fit, and a growing customer base generating early revenue. This round often marks the first significant venture capital investment, with median deal sizes reaching $6.4 million in 2023 (Carta).

What sets Series A apart is the involvement of institutional investors, who are drawn to measurable metrics like customer acquisition cost (CAC), lifetime value (LTV), and revenue growth. Unlike earlier rounds that often involve SAFEs or convertibles, Series A investors usually seek preferred stock ownership with negotiated rights and preferences.

At this stage, having robust CFO services and accurate accounting services becomes critical to handle formal valuations, term sheet negotiations, and due diligence smoothly.

Series B, Series C, and Beyond

Later rounds, such as Series B, Series C, and Series D, are designed to fuel market expansion and internal growth. By Series B, businesses typically have significant market traction, a sizable customer base, and consistent revenue growth. These rounds often range from $10 million to well over $50 million, depending on the growth potential and market.

At Series C and beyond, growth-stage investors, including private equity firms, often step in with larger checks. These institutional investors are drawn to more mature businesses with predictable revenue, making the investments relatively lower risk. At this stage, having structured fundraising and due diligence support, as well as corporate services, is essential to manage complex ownership structures, compliance, and reporting requirements across Singapore, Hong Kong, and other Asia-Pacific markets.

PikoHANA supports businesses across every funding stage, helping founders maintain clean books, prepare data rooms, and build investor-ready models. Whether you are raising a seed round or preparing for a multi-million-dollar Series C, our team ensures you have the financial clarity and compliance discipline that investors demand.

→ Explore how we help businesses scale fundraising efforts efficiently.

When Should You Consider Fundraising?

Every business grows at its own pace, which means there is no one-size-fits-all moment to start raising capital. The general guideline is that your business is ready for fundraising when:

1. You have validated that a real market problem exists, and
2. You can demonstrate apparent demand for your solution.

Getting to this point often involves market research, prototype development, and iterative testing. At PikoHANA, we help businesses at this stage build the financial discipline and fundraising and due diligence support that investors expect across Singapore, Hong Kong, and the broader Asia-Pacific market.

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Reasons to Wait Before Fundraising

Sometimes, waiting is the more brilliant move. You may want to hold off on raising capital if:

• You need stronger customer validation to prove traction. Many investors, especially in consumer markets, prefer to see sign-ups, waitlists, or early user data before committing funds.
• You have enough resources to bootstrap a little longer. Continuing to grow with your own revenue or early investments from friends and family can reduce dilution.
• You lack the time or bandwidth for the heavy lift of pitching. Preparing decks, targeting the right investors, and managing follow-ups can take three to six months of focused effort.

Reasons to Start Fundraising

On the other hand, there are clear signals that it is time to raise:

• You have traction or user growth that investors will find compelling.
• You are six months or less from running out of capital, and you need to ensure operational continuity while exploring growth opportunities.
• You need strategic support. Investors often bring more than capital; they offer valuable mentorship, networking, and operational insights to help accelerate your growth.

How Much Capital Should You Raise?

The goal is simple: raise enough money to hit your next growth milestone without over-diluting your ownership. Carta data shows that founders typically sell around 20% of equity in seed rounds and 15% during Series A.

When calculating your raise:

• Milestones: Set specific, measurable objectives, such as launching an MVP within 12 months or reaching 1,000 customers in your first year.
• Runway: Plan for 24 to 30 months of operating capital to avoid returning to investors too quickly.
• Valuation: Balance your target raise with a reasonable valuation to protect ownership while satisfying investor expectations.

For example, if you need $1 million and want to cap dilution at 20%, your target post-money valuation should be $5 million. Flexibility is crucial, as valuation negotiations are dynamic and frequently evolve during the process.

Steps to Take Before You Start Fundraising

Before approaching investors, make sure your foundation is solid:

• Network with other founders to understand lessons learned and realistic expectations.
• Engage your attorney to ensure compliance, regulatory readiness, and intellectual property protection.
• Gather financial data and build forecasts with clear metrics like CAC, LTV, burn rate, and projected runway. PikoHANA’s CFO services and accounting services help you prepare accurate models and investor-ready reports.
• Develop a compelling pitch deck that communicates your vision, traction, and path to scale.
• Target the right investors, focusing on those with experience in your market.

→ Explore our fundraising readiness checklist to prepare your business for investor due diligence.

This approach keeps your operations investor-ready while maintaining flexibility to seize opportunities. With the right financial systems in place, your business can scale its fundraising efforts without the distractions of last-minute cleanups or compliance issues.

→ Book a consultation with PikoHANA to discuss how our fundraising and due diligence support can help you prepare for investors, streamline your financial processes, and build a data room that accelerates due diligence.