Discuss how timing is a critical aspect of raising risk capital.

A venture should not wait to look for capital until it has a serious cash shortage.For a start-up,especially one with no experience or success in raising money,it is unwise to delay seeking capital because it is likely to take six months or more to raise money.In addition to the problems with cash flow,the lack of planning implicit in waiting until there is a cash shortage can undermine the credibility of the management team.When raising money,one needs either a credibly audacious plan or significant results while if a venture tries to obtain equity capital too early,the equity position of the founders may be unnecessarily diluted and the discipline instilled by financial leanness goes away.