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Seed Stage Funding 101: What it Is & How it Works

The Startup Magazine

I will tell you brief details about seed stage funding, and deal sourcing on this page, so read the conclusion until the end. What exactly is the seed funding? The initial official fundraising round is called seed funding, and it comes immediately after the pre-seed investment stage.

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Am I a Founder? The Adventure of a Lifetime. « Steve Blank

Steve Blank

Yet for every founder there are 10-20 other employees who take the near-equivalent risks in joining an early-stage company. If you’re not a founder (by choice, timing or temperament,) you may be an early employee or a later stage startup employee. Founders know they want to start something. Thanks Steve!

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Series Seed or Convertible Note? Which one is more founder friendly? Which one do investors prefer?

Gust

Assuming the company is able to make effective use of the seed money to greatly increase the value of the enterprise, all of that value therefore accrues to the founder, rather than the investor. That is a swing of 15x from the investor’s point of view!

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Understanding the Risks of VC Signaling

Both Sides of the Table

Because it is a “series&# I plan to get into some of the deeper complexities of funds such as “cross over funds&# and “why VC’s hate to price their own deals&# at a later stage. A very well known early stage fund used to have a rule that they didn’t do follow ons.

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This Week in VC with @VCMike Hirshland of Polaris Ventures

Both Sides of the Table

Since then Mike his built his career by investing in early-stage companies (seed or series A), which is remarkable given that Polaris Ventures is a $1 billion fund. So how is Mike able to do this at a time where others have warned against taking seed money from VC funds?

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How does Convertible Debt work?

Gust

For instance, if that same big shot investor would have valued your company in the early days at, say $1 million, but is eventually willing to invest in you at a valuation of, say, $5 million, that means you were able to increase the company’s value 500% using my original seed money.

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A conversation with Scott Kupor of Andreessen Horowitz, author and speaker at Lean Startup Conference 2019

Startup Lessons Learned

First, the introduction of seed money as an institutional form of capital. Before the mid-2000s, we mostly had individual angels writing small checks from their personal capital, but over the last 10-15 years we’ve seen hundreds of new institutional seed funds formed. No need to name names.

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