“Everyone wants to know how to raise money. Almost nobody asks whether they should.” 

For fintech executive Garima Shah, that’s the question too many entrepreneurs skip in the race to raise capital. “Stop thinking about check size,” she said. “Capital is one lever, not the goal.” 

The co-founder and president of e-invoicer Biller Genie, Shah returned to our webinar series to explain what matters: identifying if and when you’re ready to raise, then choosing the right type of capital for your business needs and vision. “You want to make sure capital isn’t a drain but is building your flywheel,” she said. 

Here, she unpacked it all. 

THINK YOU’RE READY?

Before you bring in investors, make sure this is the right step by answering these questions:

• Why do you actually need this capital? Be clear what you will be using the funds for, and only scale proven revenue drivers.
• What does your business look like in a year—both with and without it? If the paths look similar, you don’t need the capital.
• Do you have product-market fit? Because capital accelerates what’s working and amplifies what’s not. 
• Are you raising capital for the right reasons? Don’t succumb to competitive pressure. 
• What are you giving up, and are you fine with that? Funding often costs you equity and control—over spending, hires, even the product roadmap.

THE SIX TYPES OF CAPITAL.

Shah broke down the good, the bad and the ugly below. 

1. Bootstrapping

Most founders start here. You’re building your business with your own revenue and savings—funded by customers, not investors—which keeps your attention zeroed in on generating profits. That’s a good thing—bootstrapping isn’t scrappy; it’s strategic. Shah shared how launching Biller Genie at the start of the 2020 pandemic left the company with no other option but to bootstrap. “The hardest constraint was the greatest gift,” she recalled. “Had we received money, we would have spent it all wrong.” 

This forced focus taught her three early lessons:

• Obsess over the customer—you can’t afford to ignore a single complaint. 
• Prioritize revenue over growth—if you can’t sell it, you can’t build it. 
• Be resourceful—creativity is your only tool. 

Bootstrap for too long, however, and you’re taking on financial risk. “When you’ve built something where pouring a little gas on the fire makes one plus one equals four, not two,” Shah said, “then you’re ready to raise external capital.” 

Pro Tip: Grants, accelerators, scholarships and SBA-backed loans can provide funding without losing equity. Shah noted they’re worth exploring as well.

2. Angel Investors

Leverage your network for angel investors—individuals investing their own money, typically $10,000 to $250,000, for equity. This could be anyone from friends and family to ex-founders looking to get back in the game. The best angels bring expertise and contacts, often for little more than a board seat or advisory role. 

But the more people you tap, the bigger the headache. You’ll have too many voices at the table and, when they’re loved ones, things can get complicated.

3. SAFE Notes

Short for Simple Agreement for Future Equity, a SAFE note is a contract that lets investors give you money now in exchange for equity later. It’s simple, fast and inexpensive—and, most crucially, defers any fights over a valuation. Amounts range from $50,000 to $2 million.

The downside: a lower-than-expected valuation means giving up more equity than intended. And the more SAFEs you issue, the more that dilution compounds. “If you don’t have money to bootstrap and don’t know a lot of angel investors, SAFE notes aren’t a bad idea,” said Shah. “But make sure they’re stacked in your favor.” She recommended setting a cap and a floor—the highest and lowest possible valuations when the SAFE converts.

4. Venture Capital

Venture capital (VC), which consists of fund managers investing other people’s money for equity and board seats, may be right for you once your company finds its footing. You get sizable capital ($2 to $20 million) and the talent, connections and credibility that come with institutional backing. 

Here’s the part nobody tells you: VCs are built on volume. “They make 100 bets, hoping a few are going to hit it really big,” Shah explained. “Their incentive is to force you to keep burning money so they can take more equity.” Their goal is an exit in three to five years—a timeline that may not match yours. It’s growth at all costs to make up for the bets that didn’t pay off. 

Plus, you lose control—e.g., approval rights over future funding decisions—while gaining what Shah called cognitive load, like the added work of, say, quarterly board decks. 

5. Growth Equity

Growth equity firms also invest in established, revenue-generating businesses. But unlike VCs, they only fund a handful of companies, which means they can target durable, compounding growth. No rush to exit, no hypergrowth pressure. 

Their minority stake—usually $5 to $50 million—lets you retain more control, too. They also offer an executive bench as well as go-to-market muscle to help you scale. Yes, there’s dilution and an expected return over time, but with less timeline pressure and cognitive load.  

This was the route Shah chose for Biller Genie, once the company had crossed $10 million in revenue. “You’re not attracting growth equity if you’re below $5 million in annualized revenue,” she admitted, adding that eligibility ultimately depends on your industry and how it’s valued, e.g., EBITDA or gross revenue.

6. Private Equity

Finally: private equity, which can land a founder upwards of $100 million. This involves a majority ownership to optimize a mature, cash-generating business for an eventual exit in five to seven years. The pros: significant operational know-how and strategic support for mergers and acquisitions. Not so great: a professional governance structure—”you’ll almost be working for them,” said Shah—and the pressure to deliver on returns within their timeline. 

Worth Remembering:

• Make sure you have a lawyer. “And, no, AI is not counsel,” Shah stressed.  
• Get your paperwork in order—financials, employee contracts, legal documents and vendor agreements—and have a three-to-five-year budget forecast ready. That way, you’ll be prepared for due diligence. 
• The further up the capital ladder you go, the longer it takes to put that money to work—private equity, for instance, can take up to 18 months for a full operational overhaul.

IT’S TIME: MEETING WITH INVESTORS.

You’ve made the call to raise. Now it’s time to find investors who don’t just tolerate your vision, they amplify it.

How to Get Noticed

Networking beats cold outreach. Once you’ve identified the investor type you want, go where they are, e.g., conferences, meetups and LinkedIn groups. “Start meeting people, face to face, as much as you can,” Shah said. 

How to Vet Investors

• Talk to the other founders in their portfolio, especially the ones they don’t introduce you to. “These conversations are the real due diligence,” Shah revealed. 
• How well do they know your industry? You want experts who will challenge your thinking. 
• Understand how they invest. Does their timeline match yours? What metrics matter most to them? Are they interested in fast or sustainable growth? 
• What happens if a company in their portfolio misses a quarter? “Their answer tells you everything about how they handle adversity,” she said. “Watch for empathy vs. blame.” 
• Are they hands-on? Can you lean on their executive team as an extension of your own?

Pro Tip: “Seek diversity in your investor pool,” she continued. “VCs with women partners are statistically more likely to fund women founders.”

How to Sell It

A winning pitch is simple: who you are, what you do and why it matters. Don’t get lost explaining every feature of your product. Be able to explain, in a few minutes, why someone should invest in you—and how you’re going to change the market.