Funding Landscape
There are many different types of seed rounds happening in the US at the moment. Founders should have an understanding of which rounds align with their funding needs, respective markets, and product and GTM milestones. Not all of these will apply for many reasons.
Pre-Seed Round:
Raise: $500k to $1.5m
Valuation: $4m to $10m
Lead investors: Seed funds or angels
Most common
Seed:
Raise: $2m to $4m
Valuation: $10m to $20m
Lead investors: Seed funds, some mega seed funds
Most common
A large Seed:
Raise: $5m to $7m+
Valuation: $20m to $35m
Lead investors: Mega seed funds, multi-stage funds
Gigantic Seed:
Raise: $10m+
Valuation: $40m to $50m+
Lead investors: Multi-stage funds
[Seed funds = $40M to $150M+]
[Mega seed funds = $200M to $400M+]
Founders:
Understanding your funding needs and managing the expectations associated with capital raised is important. Your ability to secure follow-on financing is closely tied to how efficiently you utilize capital to build your product and scale GTM. As you raise a larger seed round, the expectations from investors also increase, placing a higher bar on what they anticipate you will accomplish with the funding.
Take the time to research and identify the investors who typically participate in each seed round. Different rounds attract different types of investors (seed funds, mega-seed funds, multi-stage funds, etc). Knowing the investor landscape will help you target and approach the right investors for your funding round. Qualify the investors you talk to by asking them about their ownership requirements and fund size.
Insightful!