Small rounds, big momentum

Raising money in today’s market is tough. If you’ve been hitting a wall trying to lock down venture funding, you’re not alone. More founders than ever are hitting that same wall. You want to raise millions from VCs, but the harsh reality is: it’s just not happening.

Various shifts in the market are leading to this crunch—things don’t look at all like a few years ago. The founders who raised big pre-seed rounds in 2021? They wouldn’t be able to do that today. Investors are demanding more—more traction, more revenue, more users—more proof.

The really shitty part of this is that additional proof leads to a classic chicken-and-egg problem. You need results to raise money, but you need money to produce those results. Ugh.

There is a way to break this cycle for many of you. And many more than before, actually. To break the cycle, I'm now recommending angel funding more and more.

The Angel Route: Small Rounds, Big Potential

A lot of founders think raising venture capital means going big right out of the gate. They set their sights on a $1M+ raise, convinced that anything less isn’t worth it.

Now, I have been known to drill the idea that you need to raise enough money to either get to breakeven or achieve milestones that will unlock more investment. And in years past, I would have also shared the view that raising a small amount might not be worth it… But is that still true today? Do you need that kind of money to make real progress?

What if you could raise just $100K–$200K to unlock your next milestones?

It’s not glamorous, but it’s possible—and in today’s environment, it might be your best move.

Thanks to modern resources, you can stretch a small round further than ever before:

• AI Tools
• These can handle tasks like building basic software and generating marketing content—things that used to require hiring entire teams. With $50/month of AI tools, you can automate workflows, streamline customer engagement, and even create prototypes, saving you both time and money.
• Overseas Talent
• For roles that can’t be automated, you can tap into skilled engineers, designers, and support staff abroad at a fraction of U.S. costs. Platforms and global networks make it easier than ever to connect with reliable professionals who can execute at a high level without draining your budget. (Email me for an intro to my overseas recruiter!)

Scaling Up from Small Starts

BTW, raising a small round doesn’t mean sacrificing ambition.

It’s about being realistic about what you need to get to the next step and using that momentum to unlock larger opportunities. Focus on the milestones that matter most. Whether that’s hitting revenue benchmarks, scaling your product, or demonstrating user growth, every bit of progress makes your case stronger for the future.

When you approach VCs with a lean, scrappy track record and having built real traction off of a small angel budget, you’re no longer selling them on potential. You’re showing them what’s already working. And that changes everything.

How to get this done

A lot of people have the complaint of “who knows people with that kind of money”, but raising angel funding doesn’t have to be about going to traditional angels or high-profile investors. It can just be folks who see the potential in what you’re building.

Instead of searching for a single big check, look for smaller contributions—maybe 20 people chipping in $5K each. With enough effort, you’re likely closer to these connections than you think. Is it possible you are 1 or 2 degrees removed from people who are excited about your idea and willing to throw in $1-5k? I think it is, no matter who you are.

“Don’t get hung up on finding one big check. Small contributions from a handful of people who believe in your vision can add up quickly”.

Why Angel Funding Is More Accessible

• More targets: Angels come in all shapes and sizes. They’re not sitting in some ivory tower on Sand Hill Road. They could be your neighbor or ex-coworker. They’re everywhere and don’t have gatekeepers.
  
• Angels Bet on You, Not Just Numbers: Venture capitalists want to see traction. Angels? They’re more likely to bet on you, your vision, your ability to execute, and honestly, your vibe.
  
• Fewer “Rules”: Angels aren’t bound by rigid theses or LP expectations. They’re often willing to take a chance on something unique or something that catches their eye.
  
• Speed: No drawn-out partner meetings, no endless due diligence cycles. Angels can move fast.

Raising an angel round won’t be a walk in the park. So, don’t think that I'm giving you a magical way to snap your fingers to get money. All fundraising, no matter the source, is hard and requires effort. But in this market, it’s a realistic, practical step that can help you create the momentum you need to build your startup and set yourself up for bigger raises down the line.

So, take a step back. Think about who in your network might believe in you. Start small, but aim big. You’ve got this.

Be chased,
Jason