Entrepreneur Sumit Ajwani has a simple philosophy around when it’s time to raise money: wait until it hurts.
For the founder and CEO of Toronto-based MakeOS, an AI-enabled production-management system, waiting buys time to learn from customers and sharpen your business case. It also means giving away less of the company when the round finally comes.
“We are not always the largest cheque in a round. But if we are doing our job, we are most useful at the moment when a company is still early enough to be misunderstood, but real enough that conviction can change its path.”
“Investors are fundamentally underwriting risk,” said Ajwani, drawing from his own recent experience. “The more proof you can bring to the table, the stronger your position becomes.”
The MaRS Investment Accelerator Fund has heard similar stories from several founders it backed early. The fund, one of the most active early-stage investors supporting promising Ontario startups, asked them to share what their financing rounds taught them. Each had a different path to funding, but they all arrived at the same conclusion: investors are intrigued by ambition, but they want proof the business is real, a clear understanding of who the customer is, and evidence that early traction can turn into growth.
For William Ma, IAF’s managing director, that’s where early financial backing can improve a startup’s chances, especially in today’s environment, where founders are navigating conflicting pressures. AI hype has raised valuation and growth expectations, even as investors demand clear proof of demand, disciplined spending and a credible path to profitability.
But “the more useful questions are usually much closer to the business itself,” Ma said. “What have you learned, what still needs to be proven, and what would capital unlock right now?”
For Josh Guttman, co-founder and CEO of SELLIT9, a tech re-commerce platform, the signal to raise came directly from customers.
Guttman was closing every merchant, adding resale partners, and running every enterprise deal himself. But the company had outgrown what one person could handle, and customers were asking for product features Guttman had planned to build later. New funding would let SELLIT9 accelerate that work.
“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.
But during investor meetings, he realized his deck didn’t have enough detail on how the demand he was seeing would turn into a larger business.
One investor stopped him mid-update with a challenge: “The math is breaking for me a little bit… that projection is 100x where you are today,” Guttman recalled.
As an early backer, IAF worked with Guttman to sharpen his strategy for investor conversations. He had someone to prepare for calls, talk through term sheets, and make sense of what investors were seeing in the market.
“Nobody wrote a cheque because of my massive top-down market slide,” he said. The real interest came when he walked investors through the business from the ground up. “Transparency is what built the trust that closed the round.”
Ajwani spent a decade working with production teams before starting MakeOS, but investor meetings showed him that experience did not speak for itself.