12 Fundraising Myths That Are Quietly Costing Pre-Series A Founders Their Raise

A joint resource from Intrepid and RevTech Labs

By Steve Iskander, Intrepid, and Dan Roselli, RevTech Labs

Founders don’t usually lose out on funding because their business is weak. More often, it’s because they believed something false, waited too long, over-explained the wrong thing, or walked into a pitch unprepared for a question they should have seen coming. Intrepid Finance and RevTech Labs work with pre-Series A founders every day, and the same handful of myths show up again and again, on the lending side and the accelerator side alike.

Here are 12 of them, broken down by the team with the authority to actually correct each one.

In This Article

• Raising capital always means giving up equity
• Debt financing is only for real estate or traditional businesses
• A high valuation is always a win
• Once you get funded, the hard part is over
• You need perfect financials to apply
• You should wait until you’re fully ready to apply
• Pitch competitions are pay-to-play
• You need a warm intro to get in the room
• Underrepresented founders don’t have the same access to these opportunities
• If nobody else is doing what you do, you have no competition, and that’s a good thing
• A great product is enough to get funded
• Investors expect a clean, uninterrupted growth line

From Intrepid’s Lending Desk

We spend our days talking to founders about capital, and there’s a pattern we run into constantly. Founders think about fundraising almost exclusively through an equity lens, VCs, pitch decks, cap tables, when equity is only one tool in a much bigger toolbox. These four myths are the ones we find ourselves correcting most often.

Myth: Raising capital always means giving up equity.

False. Debt financing can fund growth without giving up a single share of your company.

Most founders default to equity because it’s the version of fundraising they’ve heard about the most, not because it’s the only one available to them. Venture debt has quietly become one of the most active corners of the capital markets: U.S. venture debt hit a record $68.8 billion in 2025, even as deal volume held steady, according to Runway Growth Capital and PitchBook’s 2025-2026 Venture Debt Review. That growth isn’t happening in a niche corner of the market either. A separate Global Venture Debt Report from Stride Ventures and Kearney found debt capital being used specifically by fintech, consumer tech, and cleantech companies for working capital, growth, and runway extension, not just the traditional industries founders assume it’s built for. If preserving ownership matters to you, it’s worth a real conversation before you assume equity is your only path.

Myth: Debt financing is only for real estate or traditional businesses.

Not really. Fintech and insurtech companies use debt financing to fund growth all the time, it’s just rarely the conversation founders hear first.

Debt financing is most visible in industries where it’s been around the longest: real estate, manufacturing, equipment-heavy businesses. That’s probably why the myth sticks. But the data tells a different story for tech-forward companies specifically. Crunchbase reported that global venture capital financing for fintech companies rose 27% in 2025 to $51.8 billion, and separately, the Stride Ventures and Kearney Global Venture Debt Report found debt capital increasingly used by fintech, consumer tech, and cleantech companies for working capital, growth, and runway extension, not just the traditional industries founders assume it’s built for. If your business has predictable revenue or a clear growth trajectory, debt financing might fund your next stage without touching your cap table at all.

Myth: A high valuation is always a win.

False. An inflated early valuation can make your next raise significantly harder.

Think about it this way: the number you raise at today becomes the number you have to beat tomorrow. Carta’s State of Private Markets report found that roughly 17% of new venture rounds priced as down rounds in the third quarter of 2025 alone, and PitchBook separately reported that down rounds hit a ten-year high earlier that same year, at nearly 16% of all venture-backed deals. A down round doesn’t mean your company failed. It means your valuation outran what your metrics could support. A number that reflects real, defensible growth protects you far more than one that just looks impressive on a slide.

Myth: Once you get funded, the hard part is over.

False. Funding is the start of a new set of expectations, not the finish line.

Funding doesn’t end the work, it starts a new phase of it. Every founder we’ve worked with who treated a raise as the finish line ran into trouble within a year. Investors expect reporting, milestones, and a plan for how that capital turns into the next stage of growth. The founders who do best treat the close of a round as day one, not a victory lap. Knowing what’s expected of you after the wire hits matters just as much as knowing how to get there.

From RevTech’s Accelerator Team

At RevTech Labs, we work with fintech and insurtech founders to help them grow their businesses, build strategic relationships, and prepare for their next stage of growth. Our accelerator focuses on each company’s unique goals, connecting founders with experienced mentors, industry leaders, and resources tailored to their needs.

Myth: You need perfect financials to apply.

False. Investors and accelerators want to see that you understand your numbers and can explain your company’s trajectory, even if every metric isn’t where you want it to be yet.

At the early stages, what matters is knowing your business, understanding what’s driving your performance, and having a plan to address gaps. Founders should be prepared to discuss revenue, expenses, growth, and runway honestly. A clear understanding of where you are today, and what you need to improve, is more valuable than trying to present a perfect picture.

Myth: You should wait until you’re fully ready to apply.

Waiting until everything is perfect can mean missing an opportunity to get the support you need to grow.

The application process itself can help founders clarify their goals, identify gaps, and think critically about their business. You should be able to explain the problem you’re solving, your market opportunity, and the progress you’ve made, but you don’t need to have every answer. At RevTech Labs, we believe the right connections, feedback, and guidance can help founders build on their momentum and prepare for what’s next.

Myth: Pitch competitions are pay-to-play.

False. Founders can apply to present at Venture135 without paying an application fee.

Venture135 connects fintech and insurtech founders with investors, corporate innovators, and other leaders across the startup ecosystem. We believe founders should have the opportunity to showcase their businesses and build meaningful relationships without an upfront fee just to apply or present. The focus should be on the quality of the company, its potential, and the connections that can help it grow.

Myth: You need a warm intro to get in the room.

A warm introduction can help, but it shouldn’t be the only way a founder connects with investors and industry leaders.

Building a network takes time, and early-stage founders may not already have relationships with the people who can help their businesses grow. Through our accelerator program, conferences, and events (New York Fintech Week, Charlotte Fintech Week, Fintech + Insurtech Generations, and Venture135), RevTech Labs creates opportunities for founders to meet investors, experienced mentors, and corporate partners. Come prepared to tell your story, explain your business, and show what you’re working toward. You don’t need an established network to start building one.

Myth: Underrepresented founders don’t have the same access to these opportunities.

Unfortunately, disparities in access to capital are real, but that doesn’t mean underrepresented founders should be discouraged from pursuing funding.

PitchBook’s 2024 All In: Female Founders in the VC Ecosystem report found that companies with a female founder received only 19.9% of total U.S. venture capital deal value in 2024. Separately, the Federal Reserve Banks’ 2025 Report on Employer Firms found that 35% of Black-owned firms that applied for loans, lines of credit, or cash advances received full approval, compared with 56% of white-owned firms. These figures highlight persistent disparities in access to capital and the importance of creating more opportunities for traditionally underrepresented founders.

As one of the few majority female- and Latina-owned entrepreneurship centers and accelerators in the country, RevTech Labs prioritizes supporting and elevating traditionally underrepresented founders. We believe true innovation requires diversity of thought and perspective, and that the entrepreneurs building solutions should reflect the communities those innovations will impact. More than 50% of the startups in our accelerator are founded by people of color or women, reflecting our commitment to expanding diversity across the fintech and insurtech industries. Through our program, conferences, and events, we work to connect founders with the investors, partners, and industry leaders who can help them grow. Expanding access isn’t just about giving more founders a seat at the table; it’s about strengthening the entire innovation ecosystem.

What Investors Actually Look For

Between reviewing lending applications and watching hundreds of founders pitch every cohort, Intrepid and RevTech see the same investor reactions play out again and again. This section is less about either company’s product and more about what’s actually going on in an investor’s head when they hear these things.

Myth: If nobody else is doing what you do, you have no competition, and that’s a good thing.

False. Investors read “no competitors” as “no validated market,” not as a sign you found something nobody else could see.

It feels like a strength to say you’re the only one doing this. To an investor, it usually raises a different question: if this problem is real and this solution works, why hasn’t anyone else tried to solve it? A stronger answer names real competitors, even indirect or imperfect ones, and explains specifically what your business does differently. That’s a far more credible story than standing alone in an empty market.

Myth: A great product is enough to get funded.

Not quite. Investors weigh team, financial discipline, and market understanding just as heavily as the product itself.

A great product gets you in the room. It rarely gets you the check on its own. Investors are underwriting the people running the business as much as the thing the business makes, so how well you understand your numbers, your market, and your own gaps matters just as much. Founders who prepare across all of these dimensions consistently outperform founders who lead with product alone.

Myth: Investors expect a clean, uninterrupted growth line.

False. Investors expect founders to own their dips and explain the fix, not hide them.

Every business has a rough month somewhere in its history, and investors know it. What they’re actually watching for is whether you can explain what caused the dip and what you did about it. Founders who try to present a suspiciously perfect trajectory tend to raise more questions than they answer. Owning the bumps, and showing what you learned from them, builds more trust than pretending they never happened.

Where This Leaves You

Fundraising isn’t a single door with one key. Whether debt, equity, or some combination of both makes sense for your business depends on your growth stage, your cash flow, and how much control you want to hold onto. If you want to talk through what your actual capital stack could look like, that’s exactly the kind of conversation we’re built for.

If you’re building a fintech or insurtech company, don’t wait for the perfect moment to start building relationships and exploring your options. RevTech Labs offers opportunities to get real support by connecting with mentors, investors, and industry leaders who can help you navigate your next stage of growth. Explore Venture135 and apply to present your company to the people who can help move it forward, plus be considered for a chance to win a $200k investment from Connetic Ventures. Deadline: October 23, 2026, Apply Today.

Frequently Asked Questions

Is debt financing only for real estate companies?

No. Fintech and insurtech companies increasingly use venture debt to fund growth without giving up equity, and the broader venture debt market hit record levels in 2025.

What do investors actually look for besides the product?

Team, financial discipline, and market understanding. Investors are betting on the people running the business as much as the product itself, so how well you know your numbers and your market matters just as much as what you’ve built.

Do you need perfect financials to raise capital?

No. Investors want to see that you understand your numbers, can explain your company’s performance, and have a credible plan for growth. You should be prepared to discuss your financials honestly, including the areas you’re still working to improve.

Do pitch competitions charge founders to apply?

Not always. Venture135 does not charge founders an application fee to apply to present. This helps founders pursue the opportunity to connect with investors and industry leaders without an additional upfront cost.