It is not uncommon for entrepreneurs to tell VCs that they are not yet raising capital. There is nothing wrong with taking this approach, as it can enable founders to engage in pre-fundraising activities such as demonstrating a trendor gauging VC interest, before they begin their fundraising.

It is important to be ready to engage VCs when they get interested in your company, even if you are not officially fundraising. VCs can become interested in your companybefore you plan to raise money.

In some cases entrepreneurs can be caught off guard by pre-emptive VC interest, leading them to slow down the process or dis-engage until they are officially ready to raise money. Some entrepreneurs have a plan and they want to follow it religiously. Unfortunately, this strategy can lead to missed opportunities.

One of my mentors frequently said the best time to raise money is when you can. The wisdom in this statement comes from the fact that early-stage decision making is often more art than science; market changes, economic shifts or other more exciting opportunities can lead a VC to lose interest in the deal they were most excited about last week.

To be clear this doesn't mean that you should take money that you don't need - too much capital can make your company inefficient.  The point here is that it is worthwhile to be flexible in timing your fundraising - if you have the opportunity to take capital six months earlier than expected, you probably should do it.

Walking away from an interested investor because of the timing can be a dangerous move. At the very least, it may mean one fewer investor to drive up the price of your company. At the very most, it may mean that your company misses the opportunity to raise capital all together.