Mark Peter Davis posted a blog entry with the title “The Best Time To Raise Money Is When You Can”, which I think is worth a read. This may sounds obvious at least when considering the opposite: raising money when you can’t but there’s actually a bit more too it.
Also, this is not just true for VC-financing, the same logic applies for extending your credit line or negotiating a new loan with the bank. At the moment, it is pretty tough to get any of that from the bank but in general they are much more likely to extend your credit line when revenues are up and you have plenty of cash. Another aspect of this is actually to use some of the credit line even when you don’t really need it. We have seen several cases where the banks withdrew unused credit lines at the beginning of the credit crunch but couldn’t do the same to the ones being used.
This discussion may not be applicable for companies that don’t have the cash to start with but hopefully most will some day come to such a position and then it could be worth remembering that money is never as cheap as when you already have it.