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Fundraising Dynamics: Timing and Strategy Matter
Investment firms often face challenges with cash flow, especially when pursuing aggressive investment strategies. Despite initial promises and stories, early investments can lead to significant pressure when running low on funds. As seen in the example where a venture capital firm rapidly committed large sums while reserving portions of their capital for follow-on investments, the urgency to raise additional funds becomes critical. Realizing the need for a larger follow-up fund highlights the unpredictability of venture capital dynamics and the necessity for timely fundraising to maintain operational fluidity.