Raising Venture Capital and Growth Equity: Go It Alone or Hire Professional Help?

At F2H, we bring white-glove advisory to secondaries, capital raising, and M&A under $150M – delivering the sophistication of top-tier investment banking to small GPs, LPs, and companies. Whether you’re raising capital for a venture or growth-stage company or seeking early liquidity, our team is here to help. Contact us today to start the conversation.

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Introduction

Raising growth equity or venture capital is one of the most important inflection points for a company. The process doesn’t just determine valuation—it shapes the cap table, investor relationships, governance, and the founder’s ability to retain control.

Founders also face another big decision: should they engage an investment bank advisor to lead the process, or go directly to investors themselves?

This article breaks down what each path looks like, the benefits and risks of hiring an advisor, when it makes sense to go alone, and a practical framework to guide the decision.

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What “going it alone” really means

• Direct outreach: Founders or CFOs reach out to venture and growth equity funds themselves, often leaning on personal or board networks.
• DIY marketing materials: Pitch decks, financial models, and data rooms are prepared internally (sometimes with freelance consultants).
• Negotiation: The founder or board negotiates term sheets directly with investors, supported by legal counsel.
• Control and cost savings: No banker fees, and the company maintains full control of messaging, pacing, and investor access.
• Limitations: The process can be highly time-consuming for management, and negotiations often take place without competitive tension.

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Going it alone works best for smaller raises (<$10–15m), where the founder already has strong VC relationships or a clear lead investor lined up.

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What an investment bank / capital-raising advisor brings

Investor network and access

• Deep relationships with institutional investors, from early-stage venture funds to late-stage growth equity and crossover investors.
• Ability to curate a list of highly relevant investors and stage a competitive outreach process.

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Positioning and storytelling

• Help refine the equity story—TAM, growth trajectory, defensibility, metrics—that resonates with professional investors.
• Benchmark valuation against similar deals in the market.

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Process management

• Run a disciplined process: NDAs, data room organization, diligence management, scheduling investor meetings.
• Ensure multiple term sheets are delivered on a coordinated timeline.

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Negotiation leverage

• By running a competitive process, they can improve valuation, investor terms, and deal certainty.
• Normalize terms like liquidation preferences, governance rights, anti-dilution, and redemption features.

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Optional secondary structuring

• Many growth rounds include partial liquidity for founders or early employees. Advisors can structure this and source the right buyers.

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Pros of hiring an advisor

• Maximizes valuation through competition: Advisors bring multiple credible bidders to the table.
• Improves deal terms: Beyond price, advisors can help negotiate governance, liquidation preferences, and employee liquidity.
• Saves management time: Founders can stay focused on operating the business instead of full-time fundraising.
• Signals seriousness: Investors view banker-led processes as more credible, particularly at larger check sizes.
• Enables secondary liquidity: A well-run process can create founder and employee liquidity in a structured, defensible way.

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The costs and risks of hiring an advisor

• Fees: Typically a retainer plus a 2–5% success fee, depending on size. For a $25m raise, this can run into the low seven figures.
• Perception: Some VCs dislike banker involvement and may push back on “auction-style” processes. This perception is slowly disappearing.
• Loss of direct control: The banker controls initial investor outreach and pacing.
• Selection risk: A weak or misaligned advisor can waste time or alienate investors.
• Overhead: Management must still supply data and oversee the advisor’s work.

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When “going it alone” makes sense

• The company already has a strong relationship with a likely lead investor.
• The raise is relatively small ($5m or less) and straightforward.
• Management or board members have significant fundraising experience.
• There’s no need for a structured secondary component.
• The founder wants to avoid banker fees and preserve the perception of a founder-driven process.

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Decision Framework

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Best practices if hiring an advisor

• Choose specialization over brand: A boutique that specializes in growth equity rounds at your size/stage is often more effective than a global bank that sees you as “small.”
• Align incentives: Push for success-weighted fees rather than heavy retainers.
• Demand transparency: Insist on regular reporting on investor outreach and engagement.
• Pre-agree on secondaries: If founder liquidity is part of the plan, align expectations early.
• Stay engaged: Management should still lead key investor meetings and remain the face of the company.

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Conclusion

Raising growth equity or venture capital is one of the most critical strategic decisions a company will make. Hiring an advisor can bring structure, valuation uplift, investor access, and governance support, especially at larger raise sizes or when secondaries are involved.

But for smaller, founder-driven raises with strong existing investor relationships, going it alone can save fees and preserve founder–investor intimacy.

Ultimately, the choice comes down to size, complexity, investor access, and bandwidth. For companies at scale looking to maximize valuation and terms, hiring an advisor is often worth the cost. For leaner raises with clear investor paths, going alone can work.

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At F2H, we bring white-glove advisory to secondaries, capital raising, and M&A under $150m – delivering the sophistication of top-tier investment banking to small GPs, LPs, and companies. Whether you’re raising capital for a venture or growth-stage company or seeking early liquidity, our team is here to help. Contact us today to start the conversation.