"Wait until it hurts": the fundraising advice that is really an argument about dilution

The MaRS Investment Accelerator Fund asked several founders it backed early to write down what their financing rounds taught them, and the accounts landed on the same point: investors are intrigued by ambition, but they want proof the business is real, a clear view of who the customer is, and evidence that early traction converts into growth ^[4][5]. That matters because the advice being handed out is not really about storytelling technique. It is about when you sign.

Sumit Ajwani, founder and CEO of Toronto-based MakeOS, an AI-enabled production-management system, puts the timing rule bluntly: wait until it hurts ^[1]. His stated reasons are learning from customers and sharpening the business case, plus giving away less of the company when the round finally comes ^[2]. "Investors are fundamentally underwriting risk," he said. "The more proof you can bring to the table, the stronger your position becomes" ^[3].

The dilution half of that is arithmetic, not a finding. The proof half is where the anecdotes get specific. Josh Guttman, co-founder and CEO of the re-commerce platform SELLIT9, said his signal to raise came from customers: he was closing every merchant himself, running every enterprise deal, and buyers were asking for features he had planned to build later ^[8]. "When your customers are pulling the roadmap out of you, and the only thing in the way is resources, that's the time," he said ^[9]. His deck still did not explain how that demand became a larger business ^[10], and one investor stopped him mid-update: "The math is breaking for me a little bit... that projection is 100x where you are today" ^[11]. What worked, by his account, was the bottom-up walkthrough. "Nobody wrote a cheque because of my massive top-down market slide," he said, adding that "transparency is what built the trust that closed the round" ^[12].

Ajwani, who spent a decade with production teams before starting MakeOS, found that experience did not speak for itself; the question he got most often was who exactly he was selling to ^[14]. Knowing the customer and explaining the customer, he said, are two different things, and in hindsight he would have spent less time on his own story and more on the buyer's ^[15]. At Cyder, a Toronto fintech building loyalty programs for credit unions, co-founder and CTO William Christodoulou said investors needed help sizing the addressable market and Cyder's realistic share of it ^[16]. The raise got easier once there were results: "We had real contracts, real ARR, and real traction when we raised," he said, along with clear metrics and a path to profitability ^[17][18].

Read this for what it is. An investor asked its own portfolio what worked, three founders are named, and none of the published accounts includes a round size, a valuation or an ownership figure ^[19]. So "better terms" is a mechanism, not a measured outcome.

The pressure Ma describes is the thing to watch: AI hype has pushed valuation and growth expectations up while investors demand proof of demand, disciplined spending and a credible path to profitability ^[6]. His preferred diligence questions are narrower than a market slide: what have you learned, what still needs to be proven, and what would capital unlock right now ^[7]. If those questions keep clearing rounds through the next cycle, the top-down TAM chart is a formality rather than a case.