A capital raise in an Australian startup runs from a financial model and data room through investor conversations to a signed term sheet and close, and it takes materially longer than most founders plan for. The finance work around it, not just the pitch, is what determines whether the round lands on the terms you wanted.
What a capital raise actually involves
A raise has three sources founders mix in different orders: equity (selling a stake, no repayment), debt (borrowed, repaid with interest, ownership untouched) and grants (non-dilutive, usually narrow and sector-specific). Most Australian startups raise equity in structured rounds, pre-seed through Series C and beyond, each one priced against the traction the last round bought. The process itself is a financial model, a data room, a pitch, investor meetings, a term sheet, then legal documentation and close. The model and the data room are finance’s job, and they are usually the part that is underbuilt.
Who should actually be running the raise
Founders run the pitch. Finance runs everything underneath it, and at seed to Series A that is often still a founder wearing two hats, with a fractional CFO supporting. Tom Hunter, who runs Story Recruitment, draws the line at Series A: “while fractional finance professionals can support capital raises up to seed and potentially Series A, businesses definitively require a dedicated internal finance person by Series A.”[1] Below that line, a good fractional CFO genuinely covers it. Above it, the raise needs someone inside the business full time who owns the model before, during and after.
A first finance hire typically lands around a big seed or Series A raise, for businesses that have taken on $10m to $20m, or smaller ones around $5m to $10m.[2] That timing is not a coincidence. The raise is usually the moment a founder realises nobody owns the model full time, and the finance hire follows directly from it.
I go through the signals for a first finance hire versus a first CFO in more detail.
The mistake founders make with the timeline
A raise takes longer than founders plan for, and the value of a good finance function is not concentrated in the weeks before the round closes. As Tom put it on LinkedIn: “the best finance people are actually most valuable in the six months after the raise, not the six months before it,” because that is when the capital has to turn into the outcome the round was raised for.[3] Founders who staff up only to get through diligence, then let the function slide once the money lands, burn the raise on the wrong six months.
Equity or debt, and what it means for control
Equity dilutes ownership permanently but carries no repayment obligation, which suits a business still finding product-market fit. Debt, including venture debt, keeps ownership intact but adds a repayment schedule the business has to service regardless of how the quarter goes. Most Australian scale-ups blend both as they grow: equity for the step-changes, debt to extend runway between them without diluting further than necessary.
I set out more on choosing between debt and equity as you raise across the fundraising guides.
Common questions
When does a startup need a dedicated finance hire to raise capital?
A fractional CFO can genuinely run the finance side of a raise up to seed and often into Series A. Past that point the model, the data room and the investor relationship turn into a full-time job on their own, which is usually more than a fractional arrangement can carry alongside everything else it is covering.
What is the biggest mistake founders make when raising capital?
Treating the raise as the finish line. The best finance people are most valuable in the six months after a round closes, when the capital has to become the growth it was raised for. Founders who only staff up to survive diligence, then let the function slide once the money lands, get less out of the raise than they paid for in dilution.
Should a startup raise equity or debt?
Equity suits a business still finding its growth model, because it carries no repayment obligation, at the cost of permanent dilution. Debt, including venture debt, preserves ownership but adds a repayment schedule regardless of performance. Most Australian scale-ups use equity for step-change growth and debt to extend runway between rounds.
How long does a capital raise actually take?
Materially longer than most founders plan for. Between building the model and data room, investor meetings, a term sheet and legal close, a well-run raise usually runs several months from first pitch to funds landing, and that is before accounting for the six months of execution afterwards that determines whether it was worth it.
References
- From my own view of the market: fractional finance can carry a business through seed and often Series A, but by Series A most businesses need a dedicated internal finance person.
- From the searches I run: a first finance hire typically lands around a big seed or Series A round, for businesses that have raised $10m to $20m, or smaller ones around $5m to $10m.
- Something I posted about after watching it play out more than once: the best finance people are most valuable in the six months after a raise closes, not the six months before it.
These guides set out how we see it, drawn from the searches we run and the finance leaders we place. They are general information about the market, not financial, accounting or legal advice, and they are no substitute for advice on your own circumstances.