View from Seed

SEPTEMBER 23, 2019

*This post is part of our “pitch deck” series where we dissect the seed stage pitch deck and discuss the ideal flow for a pitch. Plus, any other non-standard items here should be called out, too, like non-dilutive grants, as applicable. develop and launch X product, reach Y number of users, generate $Z amount revenue).

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

Up and Running

SEPTEMBER 20, 2021

The popularity of convertible notes is increasing in the world of startup financing, especially in seed-stage companies. It is attractive for seed-stage companies that have not had time to show much traction in terms of their product or revenue. Add details of possible dilution when bringing on investors.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). This situation is not always in the best interest of founders.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Startup Professionals Musings

AUGUST 1, 2016

Getting investors to trust you with their money is always a challenge, and it’s even more difficult in the early stages, where you don’t have a significant revenue stream, a few customers, or maybe even a product yet. At these stages, it’s all about you, and your ability to communicate and execute effectively.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

K9 Ventures

JUNE 12, 2012

While it it may not feel that way, the data suggest that there is indeed too much capital in the system — especially so at the seed stage, with more and more individuals and larger funds trying to invest in companies at this stage.). This situation is not always in the best interest of founders.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

This is going to be BIG.

MARCH 16, 2020

As a seed stage investor, I know the math. Some key existings who didn’t want to see their prior money get lost wouldn’t budge on a dilutive financing, despite the fact that they knew where we were headed. Half the companies I invest in won’t provide a financial return. The answer, unfortunately, was to declare bankruptcy.

Bankruptcy 103

Bankruptcy Private Equity Seed Stage Dilution 103

The Next Web

FEBRUARY 27, 2014

As an example, a new restaurant may get valued at 3-4x EBITDA (earnings before interest, taxes, depreciation, and amortization) and a hot dot com business with meteoric traffic growth could get valued at 5-10x revenues. Sophomores are beta site to full production site with initial users (seed stage angels—raise $500K to $1MM).

Valuation 167

Valuation Forecast Seed Stage .Net 167

K9 Ventures

OCTOBER 10, 2017

A Seed round today — like the Series A round of yesteryear — requires some kind of traction or product. In contrast, you *don’t* need much to qualify as a Pre-Seed stage company. Pre-Seed investors should *not* be looking for any kind of traction. 6M-$15M used to scale customer acquisition and revenue).

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

View from Seed

JANUARY 26, 2016

In the next post, I’ll talk about how we think about pre-seeds at NextView. It’s become increasingly common for startups to raise several seed rounds, and this has led to a bifurcation in the seed stage between what are known as “pre-seed” (or “genesis”) and institutional seed rounds.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

View from Seed

JUNE 30, 2015

Over a third of our investments happen pre-product (so by definition, before PMF), and two-thirds are pre-revenue. Does that mean we are invest “pre-seed”? Does this mean we are an “institutional seed fund”? FWIW, at NextView, we invest from inception to strong PMF. We’re not at normal yet.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

Hippoland

MAY 16, 2018

on the state of Q2 2018 seed-stage fundraising. Just in general, given how cheap it is to start a company and how few pre-seed investors there are, I think it makes sense to bootstrap to some level of revenue traction before fundraising. Post-seed rounds are being done by seed investors.

Seed Stage 48

Seed Stage Valuation Convertible Security Equity 48

Hippoland

MAY 16, 2018

on the state of Q2 2018 seed-stage fundraising. Just in general, given how cheap it is to start a company and how few pre-seed investors there are, I think it makes sense to bootstrap to some level of revenue traction before fundraising. Post-seed rounds are being done by seed investors.

Seed Stage 48

Seed Stage Valuation Convertible Security Equity 48

www.paulgraham.com

APRIL 28, 2010

There never has to be atime when you have no revenues. Sometimes angels deal terms are as fearsome as VCs.Other angels, particularly in the earliest stages, will invest basedon a two-page agreement. Whatkind of anti-dilution protection do they want? So seed investors usually care lessabout the idea than the people.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Startup Lessons Learned

AUGUST 24, 2009

And as everyone’s attention starts to focus on those same indicators, their value is being diluted. Seed-stage investors are learning the metrics of traction, and are getting better at identifying those companies that are really achieving validated learning about customers. What is the right revenue model?

San Francisco 113

San Francisco Lean Technical Review Distribution 113

Rob Go

AUGUST 26, 2013

. “Institutional seed” rounds on the other hand tend to look like this: >$750K. Post-product, early customer data, somtimes real revenue. Institutional seed investors or larger VC funds. This led to a period of seed stage exuberance, and that led to higher valuations, larger rounds, etc.

Valuation 68

Valuation Seed Stage Syndicate Syndication 68

www.paulgraham.com

OCTOBER 23, 2010

Usually you get seed money from individual rich people called"angels." the seed stage, investors dont expect you to have an elaboratebusiness plan. They get the same kind of stock and get diluted the same amount in futurerounds. So the deals take longer, dilute you more, and imposemore onerous conditions.

Startup 105

Startup Cofounder Software Stock 105

This is going to be BIG.

JUNE 2, 2010

And yes, this post may seem self-serving, since I work at a seed-stage investment fund. Historically, that was one where the business was clear and there was some initial revenue, even if slight. Feel free to take this free content with a grain of salt.

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

dondodge.typepad.com

JANUARY 15, 2011

The second and third rounds of funding take additional shares of equity and dilute existing investors and founders. They start out higher and get diluted down to these levels after multiple rounds of financing; CEO - 4% VPs - 1% each Director level -.5% How much money should I take? 5% Managers -.25% 25% Individuals -.05

Equity 40

Equity Employee Dilution Valuation 40