View from Seed

OCTOBER 21, 2014

As the seed-stage startup fundraise process has received more transparency in recent years, ranging from published advice on how to raise seed capital to increased availability through AngelList, Funders Club, and various accelerator programs, I’ve noticed another trend emerging.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

Startup Professionals Musings

AUGUST 3, 2015

Others spend money on mailing lists and investor contacts and “cold calling” a few thousand people, hoping to find someone willing to take a risk on an unknown company. As an angel investor, I believe this approach is a waste of time, since no honest investor is likely to seriously consider a request for money from a stranger.

Cost 120

Cost Angel Groups Due Diligence Silicon Valley 120

Up and Running

JUNE 14, 2010

conference at which a couple of professional venture capitalists and a couple of successful angel investors talked about trends. One thing that came up repeatedly, then, was the impact of steeply declining web development costs on professional investment. About three years ago I attended a Web 2.0

Disintermediation 66

Disintermediation Venture Capital Angel Investor Seed Stage 66

Both Sides of the Table

JULY 25, 2010

. “Yes&# was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Both Sides of the Table

APRIL 20, 2011

They chose the name First Round Capital because they thought capital would be deployed most efficiently at smaller seed stage rounds considering the cost to build an internet business had come down drastically. Investing Strategy.

Pre-Money Valuation 284

Pre-Money Valuation Technical Review Cofounder Cram Down 284

Startup Professionals Musings

MAY 1, 2011

If you are new to the entrepreneurial world of startups, you are likely confused by the terminology of seed-stage, lean startups, micro-VCs, and Super Angels. Don’t be embarrassed, since even professional investors are often confused these days by the new terms, as well as old terms used with new meanings. Super Angels.

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Early Stage Seed Stage Angel Investor Silicon Valley 231

Startup Professionals Musings

JULY 16, 2012

If you are new to the entrepreneurial world of startups, you are likely confused by the terminology of seed-stage, lean startups, micro-VCs, and Super Angels. Don’t be embarrassed, since even professional investors are often confused these days by the new terms, as well as old terms used with new meanings. Super Angels.

Early Stage 253

Early Stage Finance Seed Stage Entrepreneur 253

Startup Professionals Musings

FEBRUARY 15, 2012

If you are new to the startup space and Angel investing, you probably don’t realize that some groups of Angel investors charge entrepreneurs a fee to pitch to their groups. In reality, these fees are usually trivial compared to your real costs of preparing, travelling, and presenting to investors.

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Angel Groups Angel Investor Due Diligence Seed Stage 237

Hippoland

MARCH 30, 2018

The fundraising landscape in 2018 for pre-seed and seed-stage companies has changed a lot even in just the first few months of this year. These are groups of angel investors – individuals who are pooling their money together to purchase tokens. B) Operations costs more.

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Seed Stage Syndicate Syndication Convertible Security 48

Hippoland

MARCH 30, 2018

The fundraising landscape in 2018 for pre-seed and seed-stage companies has changed a lot even in just the first few months of this year. These are groups of angel investors – individuals who are pooling their money together to purchase tokens. B) Operations costs more.

Seed Stage 48

Seed Stage Syndicate Syndication Convertible Security 48

Gust

JULY 8, 2012

If you are new to the entrepreneurial world of startups, you are likely confused by the terminology of seed-stage, lean startups, micro-VCs, and Super Angels. Don’t be embarrassed, since even professional investors are often confused these days by the new terms, as well as old terms used with new meanings. Super Angels.

Early Stage 177

Early Stage Finance Seed Stage Entrepreneur 177

VC Cafe

FEBRUARY 27, 2024

What’s the difference between an angel round and pre-seed round and why do I believe we’ll see more pre-seed rounds taking place in 2024? While the answers are somewhat semantic, the pre-seed funding round is making a comeback in 2024 startup financing.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Startup Professionals Musings

DECEMBER 13, 2010

If you are new to the startup space and angel investing, you probably don’t realize that some groups of angel investors charge entrepreneurs a fee to pitch to their groups. Weigh the cost against the track record and “reach” of a specific angel group. Consider your startup stage. Find and fix that first.

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Angel Groups Entrepreneur Angel Investor Due Diligence 234

Startup Company Lawyer

AUGUST 31, 2012

Over the past few years, convertible debt has emerged as a quick and inexpensive method for startup companies to raise money from angel investors and early stage venture funds. At the maturity date, there is a risk that investors may demand repayment. Background. The YC Series AA documents contain similar provisions.

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Convertible Security Equity Security Preferred Stock 73

Startup Professionals Musings

AUGUST 1, 2016

After many years of working with angel investors seriously trying to find new ventures worthy of their hard-earned money, I find their frustration often exceeds that of entrepreneurs sincerely looking for financial help. Investors are most interested in providing money for scaling of a proven solution.

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Due Diligence Intellectual Property Preferred Stock Seed Stage 120

Both Sides of the Table

JULY 15, 2010

If you’re an entrepreneur, all else equal you prefer convertible debt because the deal is priced at a later stage when you’re worth more. If you’re an angel investor you prefer a “priced&# rounds because you want to lock in a lower price given that you’re taking more risk up front.

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Southern California Venture Capital Seed Stage Angel Investor 210

Hippoland

JANUARY 4, 2017

If this is your first time raising money, the mechanics of how investors buy into your company can be very confusing. Here’s a quick primer on how investments tend to work in startup companies at the seed stage. Equity Traditionally, investors have invested in companies to receive equity, or shares in a company.

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Convertible Security Equity Security Silicon Valley 48

Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. This adds cost and administrative complexity, especially with multiple closings on different dates. Convertible debt?

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Finance Convertible Security Equity Seed Stage 134

This is going to be BIG.

SEPTEMBER 1, 2010

Sure, if you’re Jack Dorsey, creator of Twitter, you can dictate your terms, but last I checked, most of the entrepreneurs First Round and most of the seed stage firms back don’t have that same kind of track record. The investor water cooler occasionally falls victim to reputation racketeering. It’s a bit like dating.

Equity 104

Equity Term Sheet Seed Stage Angel Investor 104

Startup Company Lawyer

MARCH 14, 2010

I think that there are certain situations where the Series Seed and other stripped down equity financing documents might be appropriate, but I know that there are lots of situations where early-stage investors probably wouldn’t agree to the Series Seed terms. Investor pressure. Series Seed.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

SEPTEMBER 5, 2012

” And some seed stage investors told me, “I prefer not to fight over price now. In fact, most early investor work hard to help their startups get to the next level so it makes no sense for the angel investor and founders to be at odds. Investors call Bull Cap. Enter “the cap.”

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Steve Blank

FEBRUARY 26, 2020

These elements of the business model– revenue (pricing, pricing strategy), distribution channel, How to Get/Keep/Grow customers, Key Activities, Resources and Costs – are other, critical parts your start up needs to understand and have in place. Pre-seed Round of Funding. At the high-end pre-seed angel funds might invest.

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Cofounder Seed Stage Valuation Metrics 429

Jeff Hilimire

AUGUST 30, 2013

One inhibiting factor is Atlanta’s community of angel investors and venture capital firms, many of whom have little experience with B2C startups. Mobile games are mostly free, or cost a few dollars. “We just need more successful B2C companies to take advantage of the talent,” he said.

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Atlanta B2C Georgia Los Angeles 77

www.paulgraham.com

APRIL 28, 2010

If your friends or family happen to be rich, the line blurs betweenthem and angel investors. At Viaweb we got our first $10,000 ofseed money from our friend Julian, but he was sufficiently richthat its hard to say whether he should be classified as a friendor angel. Angel Investors Angels are individual rich people.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Hippoland

FEBRUARY 12, 2018

Etc… At the pre-seed stage, a big way to stand out is if you have a V3 statement (as opposed to a V1 statement). At a high level, business is simple! :) You bring revenue in and your costs send money out the door. You want your revenue to be higher than your costs. But the execution is hard. And that’s ok.

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Seed Stage Business Model B2B Email 48

Hippoland

FEBRUARY 12, 2018

Etc… At the pre-seed stage, a big way to stand out is if you have a V3 statement (as opposed to a V1 statement). At a high level, business is simple! :) You bring revenue in and your costs send money out the door. You want your revenue to be higher than your costs. But the execution is hard. And that’s ok.

Seed Stage 48

Seed Stage Business Model B2B Email 48

Both Sides of the Table

OCTOBER 17, 2009

So they set up seed programs that allowed for rapid decisions for $500k or less, often done as convertible debt for both speed and cost reasons. Many VCs who do lots of seed stage deals are very supportive and active. I think they definitely qualify as a VC and not a seed fund. They do many early-stage deals.

Software Review 283

Software Review Term Sheet Due Diligence Southern California 283

VC Cafe

FEBRUARY 6, 2011

If you just travel in, don’t attempt it, it will be an expensive waste of energy/time/cost that will get you polite meetings but no engagement. And what do the investors think? In answer to the question Do Silicon Valley Angels invest in startups overseas?

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Silicon Valley Startup Seed Stage Delaware 104

ReadWriteStart

JANUARY 28, 2022

Considering that a warrant is often issued to decrease the cost of a debt issuer, the expiration period is typically more than two years after the warrant is first issued. It is not possible to shift costs and revenues in a linear manner. Then, it considers how changes in this scale will impact the expenses associated with it.

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Valuation Equity Warrant Common Stock 108

Austin Startup

FEBRUARY 12, 2019

We had raised a small round of funding in 2013, led by a local angel investor who was a member of Central Texas Angel Network, and used the funds to build our first product (a mobile website) and launch with recommendations from friends of mine in Austin the week before South by Southwest Festival. And at what cost?

Silicon Valley 48

Silicon Valley Technical Review Venture Capital San Francisco 48

mashable.com

SEPTEMBER 12, 2011

While all of these factors are true to an extent, the truth of the matter is that the reduced costs of hardware and software are easily offset by the expense of engineers and experienced business people. Nearly all of your costs will be headcount, primarily in the engineering department. Getting funded is hardly the end-all.

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Startup Social Media RSS Social Network 79

rapidrollout.wordpress.com

OCTOBER 23, 2010

Until your wireframe is done, it’s too early to talk to developers or potential investors. Or you can find seed-stage investors who will give you the money to hire a developer. That’s why you need to be looking for seed-stage investors at the same time as technologists. 10-15/hour.

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Technical Review Fractional CTO Partner CTO Hire 40

Hippoland

AUGUST 31, 2018

Also, to be clear, pre-seed doesn’t mean that one just thought up an idea yesterday and has done nothing. There’s a lot of work to do to prepare to raise money at this pre-seed stage. I believe that some of these seed rounds are way too large, and there’s a looming market correction on the horizon for everyone.

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Pre-Money Valuation Valuation Silicon Valley Early Stage 90

Women Entrepreneurs Can

MAY 9, 2019

This is the point where a lot of startups are ready for an angel investor- individuals who have earned income that is exceeding $200,000 or have a net worth of more than $1 million. This is a perfect scenario where it would be appropriate to pitch prospective corporate sponsors.

Programming 40

Programming Sweat Equity Startup Private Equity 40

Rob Go

AUGUST 21, 2013

Seed stage founder heuristics. We talked about this in the context of founders risk, equity splits, and opportunity cost. This reminded me also of a question a really successful angel investor I know has found to be the single most important determinant of success or failure.

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Distribution Founder Product Seed Stage 48

Hippoland

AUGUST 31, 2018

Also, to be clear, pre-seed doesn’t mean that one just thought up an idea yesterday and has done nothing. There’s a lot of work to do to prepare to raise money at this pre-seed stage. I believe that some of these seed rounds are way too large, and there’s a looming market correction on the horizon for everyone.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48

techcrunch.com

SEPTEMBER 2, 2012

There has been no shortage of controversy and criticism around the convertible note, a popular investing vehicle that’s used by seed stage and angel investors. Ressi estimates that the debt note now accounts for over 50% of all angel and early stage deals. → Learn More.

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Equity San Francisco Technical Review Angel Investor 87