For every founder, a moment will come when they need to raise funds for their startup. Raising capital is truly a mark of a great CEO. Even though it doesn't guarantee startup success, it helps smoothen the journey. 

Startups raise funding for different reasons. Some startups raise to expand into new markets, make key hires, build new services, continue research etc. Whatever the reason is, raising funding helps the startup to grow at the pace that it desires. 

But funding is not a walk in the park. Less than 10% of startups raise funding despite the flashy announcements that happen regularly. With the current funding winter, funding is even harder to come by. So a startup needs to have a watertight fundraising plan.  So how can a founder build one? 

First, the founder has to take care of what he has control over. The founder needs to determine when to raise and how much to raise. The best time to raise funding is usually when you don't need it. A startup should raise funding with at least six months' runway. This is because the fundraising process is unpredictable and it can take longer than one expects. The less runway for a startup, the more desperate the founders will be and the less leverage while negotiating. 

It is also important for a startup to raise funding when it is on a high that is, when the startup has hit some significant milestones. Investors love a rocket ship that is ready for takeoff. 

The next step is to determine how much to raise. This is very crucial. Sometimes, founders tend to ask for too much money when they can't justify its use. To determine how much a company needs to raise, one will need to do some financial projections for operation expenses. Take your projected monthly expenses and multiply them by 18-24 months. This should be able to give a concrete figure to work with. 

If you know how much to raise and when then the founder can begin looking at deciding which funding would work for them. There are various forms of financing, so it is important to get this right. A founder can look at equity financing (and decide on the round), or look at debt or convertible notes, SAFE etc. 

With all of these in place, the founder can now move on to zeroing down on the investors. It is important to have a concrete list of investors who are most likely to invest so that you don't waste your time. Coming up with this list will include looking at some data. 

You should look out for investors that have invested in similar startups. Similar can be in so many ways. Geography, sector, funding amounts, stage, funding rounds etc. If you have investors who have backed startups that are similar in any metric, it is a good starting point for you as a founder. 

After that, pitch, pitch, and pitch.