4 Unexpected Mistakes Founders Make When Raising and How You Can Avoid Them, with Aaron Schwartz, Co-founder of Orita.ai

Jan 29, 2025
Joshua

On a recent episode of Founders and Empanadas, I sat down with Aaron Schwartz, co-founder of Orita.ai, to discuss the often-overlooked pitfalls of fundraising. Between bites, he shared some counterintuitive insights that challenged my understanding of the fundraising process.

I hope his insights can help you raise capital more quickly, and with less stress:

1. Raising Money Without a Clear Plan for Returns

The most profound insight from our conversation was Aaron's perspective on the fundamental goal of fundraising: "The goal is not to raise money, the goal is to return money." While it's exciting to raise a million dollars, if you can't confidently show how you'll generate a 10x return, you're setting both yourself and your investors up for failure. The solution? Have a bulletproof plan you can execute on before you start raising.

2. Racing Through Too Many Meetings Too Quickly

While many founders try to pack their schedules with 5+ pitches per day for weeks straight, Aaron warned against this approach. The problem isn't the number of meetings – it's that you don't give yourself time to learn and iterate on your pitch. Instead of rushing, take time between pitches to reflect on what's working and what isn't. Use each meeting as a learning opportunity to refine your approach.

3. Misunderstanding Investor Psychology

One of Aaron’s most striking points was about handling rejection. He emphasized that founders often forget that their priority isn't the same as the investor. Even if you're the perfect fit for a fund and hit all their criteria, they might still say no for reasons entirely outside your control – whether it's their internal dynamics, competing deals, or someone being hungry because they skipped lunch. The key is not to take these rejections personally, and to remember that fundraising success or failure doesn't define your worth as a founder.

4. Treating Fundraising as Just About Capital

Contrary to common belief, Aaron thinks that more investor meetings can be better, particularly for B2B companies. He views fundraising as the best business development strategy available to early-stage companies. Each investor meeting is an opportunity to learn from experienced operators, get introductions to potential customers, and build relationships that extend far beyond capital. Instead of trying to minimize the number of meetings, use them strategically to build your network and pipeline.

The overarching theme from our conversation was clear: successful fundraising isn't just about the money – it's about building genuine relationships, having a clear path to returns, and using the process itself as a tool for growth. As Aaron put it, while wiping away tears from a particularly spicy empanada, "You're not competing with who they're looking at today. You're competing with every other possible future deal."

For founders embarking on their fundraising journey, these insights offer a valuable roadmap for avoiding common pitfalls and approaching the process with the right mindset. And maybe most importantly, they remind us that in fundraising, the goal isn't just to get the money – it's to create real, lasting value.

Want even more insights on successful fundraising? Make sure to listen to this week’s episode:

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