The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America's startup scene contribute answers to timely questions about entrepreneurship and careers. Today's answer to the question "When is the best time to look for investors?" is written by Jay Radia, CEO and co-founder of Yieldify.

There are lots of things that I think make fundraising exciting: the constant adrenaline, the prospect of new partnerships and advisors, the opportunity to share my enthusiasm for my company. But make no mistake: fundraising is hard work and requires a CEO's full attention. There are no short-cuts, and a carefully timed raise can make for smoother sailing down the already rocky road of startup life. As someone who's had experience with several startups (14, to be exact!), I've gained some insights over the years on getting investors on board.

When you have traction.
With only .05% of startups getting funding from VCs, it pays to have a strategy before starting fundraising. Investors aren't going to be interested only in ideas; you have to show that you have something for them to actually invest in. When we first raised money for my company, we made sure that we had a minimal viable product (MVP) -- even if only with a very basic set of functions -- and made sure that we had paying customers on the platform (and therefore some revenue), to show that there was interest and demand for the product. There's huge value in an investor being able to "touch and see" a product: it makes it seem more viable and real, and shows them that you can get things done.

Based on our early data, we were able to show a logical progression to a large market opportunity. The more proof points you can hit quickly and early on, the better -- from the investor's standpoint, it limits the business risk.

When you have a lead investor on board
I learned this one the hard way. When I was raising seed capital for Yieldify, I didn't have a lead investor to help me organize the other 20 investors -- so I spent a lot of time talking to individuals, pushing them along, and generally managing logistics. A lead investor provides capital and expertise to a fundraise, which is especially valuable to an earlier stage company.

Lead investors of course provide substantial financial support (typically 20-25% of a raise), but can also have insights into business strategies and ways to position the company for a strong fundraise. Having a lead investor also signals to other investors that you've secured a substantial vote of confidence, which also reduces perceived business risk. And a good lead investor is crazy-enthusiastic about your business -- making them an extra (and influential) evangelist for your company and resulting in better recruitment of other investors.