Entrepreneur Sumit Ajwani has a simple philosophy around when it\u2019s time to raise money: wait until it hurts.<\/p>\n
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.<\/p>\n
\u201cWe 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.\u201d<\/p>\n
\u201cInvestors are fundamentally underwriting risk,\u201d said Ajwani, drawing from his own recent experience. \u201cThe more proof you can bring to the table, the stronger your position becomes.\u201d<\/p>\n
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.<\/p>\n
For William Ma, IAF\u2019s managing director, that\u2019s where early financial backing can improve a startup\u2019s chances, especially in today\u2019s 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.<\/p>\n
But \u201cthe more useful questions are usually much closer to the business itself,\u201d Ma said. \u201cWhat have you learned, what still needs to be proven, and what would capital unlock right now?\u201d\u00a0<\/p>\n
For Josh Guttman, co-founder and CEO of SELLIT9, a tech re-commerce platform, the signal to raise came directly from customers.<\/p>\n
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.<\/p>\n
\u201cWhen your customers are pulling the roadmap out of you, and the only thing in the way is resources, that\u2019s the time,\u201d he said.<\/p>\n
But during investor meetings, he realized his deck didn\u2019t have enough detail on how the demand he was seeing would turn into a larger business.<\/p>\n
One investor stopped him mid-update with a challenge: \u201cThe math is breaking for me a little bit\u2026 that projection is 100x where you are today,\u201d Guttman recalled.<\/p>\n
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.<\/p>\n
\u201cNobody wrote a cheque because of my massive top-down market slide,\u201d he said. The real interest came when he walked investors through the business from the ground up. \u201cTransparency is what built the trust that closed the round.\u201d<\/p>\n
Ajwani spent a decade working with production teams before starting MakeOS, but investor meetings showed him that experience did not speak for itself.<\/p>\n