At the core of the Entrepreneurs' Organization (EO) is a commitment to helping entrepreneurs learn and grow in every stage of business. Securing adequate funding is a key requirement for growth. To address this topic, we tapped Julia Polk, who has mentored more than 100 startups and is currently chief financial and chief strategy officer for data analytics company IQuity, which has secured more than $2.6 million in grant funding as well as more than $5 million in private capital since 2015. In previous roles, she facilitated more than $30 million in venture and angel capital. We asked Julia about best practices for raising funding in entrepreneurial ventures. Here’s what she shared.

What three tips would you offer startups seeking to raise capital?

  1. Be prepared. Do your homework on investors, so you don't waste their time if you’re not what they're looking for, they're out of money, or their fund wants to write a larger check than you need.
  2. Know your numbers. How do you make money? How do you win new customers? Better yet, show up with a few customers. Even if they're small or inconsistent, investors want to know whether the “dogs are eating the dog food.”
  3. Smart, committed investors trump high valuations and quick funding-;no matter what. Not all money is created equal. You want partners who will help you find new customers and grow. Don’t be greedy with early equity. Raise enough money, because you'll likely need more money and more time.

What are the three biggest mistakes you've seen early-stage entrepreneurs make around funding?

  • Building something nobody wants to buy because they didn't talk to enough customers. If you're making a hovercraft, but customers want a little red wagon, you're wasting time and money.
  • Misunderstanding market opportunity and competitors. Just because there's no direct competitor doesn't mean someone with more money can't adjust and beat you. Know what’s out there on the periphery.
  • Creating a homogeneous team. The right team is critical, and you need a diversity of culture, age and thought. Everybody must wear multiple hats.

To fix these problems, surround yourself with a diverse team of advisors who will help you--not just praise you. You need people to challenge the usefulness and marketability of your idea and pinpoint weak areas that need more work.

Talk to a lot of people, not just friends and family. Ask potential customers to sign a letter of intent, showing that whether or not they're currently a paying customer, they may be one in the future. Finally, take advantage of resources in your community to learn the process of venture creation.

To what do you attribute your success in raising and facilitating capital?

I’ve been an investor, startup operator or mentor to over 100 startups. I’ve watched incredible young people do the impossible because they don't believe they can fail.

I value listening and am drawn to entrepreneurial passion. Most importantly, I have 27- and 23-year-old children. When I see a young entrepreneur striving to make their dreams come true, I hope someone is sitting across from my kids supporting them like I support entrepreneurs. It's a giveback to karma.

What’s the biggest lesson you’ve learned in the venture capital realm?

VC funding depends on trust, like any relationship. Most of us in that world, myself included, have seen a breach of trust. There’s a startup culture of "fake it ‘til you make it." I think some founders struggle to know when they’ve crossed the line from honesty to dishonesty. Many investors have suffered from truly wanting to believe in someone, and subsequently following them over the edge of a cliff.

Full transparency--of both good and bad developments--is critical to building successful companies. It’s a must-have core value for teams that I lead.

How has venture capital changed, and what will the future of VC bring?

Thirty years ago, VC checks were much smaller: $10 million was a big early-stage venture raise then. Now, more companies realize the value of bringing in a strategic partner as a capital investor for the talent, contacts and experience young companies just cannot afford.

The other significant change is the volume of available money. VC funds are much larger, but accessing their capital is tough because their check sizes are often too large for startups. I’ve seen how too much money can precipitate disaster; it's important for people to be good stewards of invested capital. It is, after all, “other people’s money.”

So what's next? Unfortunately, most funding goes to those who've been funded before. I’m always stunned when the same guy who tanked three companies lands the CEO role again.

I expect new structures to materialize for the massive number of new companies launched that are unlikely to attract venture capital because they can’t grow at the pace that venture capital seeks. Revenue-share deals, capped returns on debt, and equity deals are things you'll see in alternative structures.

Social impact will also be a big part of getting VC’s attention. More companies need to deliver on triple bottom lines. Millennials are influencing how corporate America treats the Earth, employees and customers. With the shift in wealth from Boomers to their children, these issues will drive growth in funds available to companies that meet these targets.

I’m also excited to see new investment firms and funds led by more diverse individuals that invest in companies also led by diverse, historically under-represented individuals. It’s been a homogenous world for a long time, and that’s changing for the better.