This post is the ninth in a series of ten posts about the 10 key reasons your consumer startup will succeed.

I speak with hundreds of aspiring consumer entrepreneurs and review thousands of executive summaries and pitches each year. From all this activity, certain patterns emerge that remain consistent with successful consumer startups. In this series of 10 blog posts, I will list the top 10 reasons consumer startups succeed. Note that all seem necessary, but none on their own are sufficient.

#9 Fundraising

One of the most important jobs of a startup CEO is fundraising. Choosing the right investors for your startup can be challenging for many founders, and should be approached with as much thought as other areas of your business. Here are a few critical tips that will help attract the right investors for your startup: 1. Investor Fit. Instead of searching for the highest bidder, look for a partner that will stick it out with you. Find the right individuals with relevant expertise, who share your vision, and who will add value, especially for your early rounds. 2. Beware of Party Rounds. While it can be enticing to have brand name VCs writing small checks early on, beware of big “party rounds” where many investors contribute a relatively small amount. This often doesn’t work out well for startups. With too many investors with small stakes, there’s often no one to take responsibility and roll up their sleeves. A VC that normally invests $5M+ won’t have the time to spend on a small Seed investment. Founders will then resent their lack of help and not look to these VCs when it comes time to raise a Series A round. 3. Cap Table. I often see an early co-founder who’s no longer involved with the company retaining a large equity stake in the business. This is a red flag. Investors understand rewarding an early contributor with some equity, but that should be in proportion to their role over the lifetime of the company. Giving away too much equity to non-critical contributors – both departed founders and non-cash investors – will create dilution issues for the founders and new employees down the road. Take care of the messy cap table early in the life of the company. Negotiate those individuals to a realistic percentage that won’t cripple your fundraising efforts. 4. Dilution. Taking in too much investment capital very early can make it tough for founders to retain meaningful ownership after Series B or even Series A. I’m always concerned when I see an investor owning up to 50% of a company or more at the Seed stage. We like to see the core team incentivized to stick it out, and that’s more likely to happen when there is a more balanced cap table and the founders and key employees own the right amount of the company. 5. A Note on Notes. A convertible note isn’t a deal-breaker for us at Maven – we are happy to invest at a fair cap or a reasonable priced valuation. However, founders should be aware that doing multiple subsequent convertible note financings, as is becoming common today, often complicates future financings. A few common issues that might arise include confusion about whether the cap was pre- or post-money, an unclear view of how much of a company each investor actually owns, and even calculation of the interest due as of a specific signing date. So while it’s more acceptable for companies to raise funding this way today, it is messy and less preferred. 6. Timing. The timing of when you meet with investors is very important. Regardless of what investors might say, you often only have one shot at a pitch. If you meet too early and get a no, that usually means no forever, not just for right now. Make sure you are ready for the early “coffee meeting” to be your first, and sometimes only, impression. 7. AngelList. Thankfully, there are more new options for fundraising today than ever before. There are a growing number of Seed funds, and AngelList is an incredible opportunity to reach a broad array of investors. We’re proud to be an investor in AngelList, and we also manage a $600k Syndicate. I encourage founders to research and understand the AngelList Syndicate platform. In many instances it makes strategic sense to fundraise on the platform, especially if your company will benefit from having a range of investors as advocates. Fundraising is an emotional and challenging undertaking for founders. When you successfully close your round, quickly celebrate! And then get right back to the real work, which is building a meaningful, lasting company.