How Much Seed Capital Should You Actually Raise?

View from Seed

In a world of pre-seeds , seeds, seed extensions, super-seeds , and more, figuring out the right amount to raise for a startup’s seed round can seem like a moving target. But equally beneficial can be to keep other seed players warm who almost got there initially.

How to Divide Founder Equity: 4 Criteria to Discuss

View from Seed

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly.

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Finance Fridays: Getting Started – Allocating Equity and Founder’s Investment

Feld Thoughts

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business. Jane and Dick each brings a similar level of skill and capability to the business, making it easy for them to agree to a 50/50 equity split.

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Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Sometimes co-founders put off the equity split question for some time. Both of these are typically reflected in the founder equity split.

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Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Sometimes co-founders put off the equity split question for some time. Both of these are typically reflected in the founder equity split.

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The 5 Key Stages of Equity Funding

Growthink Blog

When seeking equity investments, the source of capital is, for the most part, tied to the stage of capital being raised. You see, equity capital is raised in stages or rounds. Pre-Seed Funding 2. Seed Funding 3.

How to calculate the equity split between co-founders in a startup

The Next Web

There are a lot of variables to go into calculating a fair equity split a startup team. If people are funding the business, they should get a premium because at the end of the day, cash funding founders are acting no different than a seed stage investor.

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The Silliness Of Recapping Seed Rounds

Feld Thoughts

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The new money comes in at a pre-money valuation of $100, but includes a complete refresh of founder equity to 40% of the company. But in this cycle, I hadn’t seen it in a seed round.

A Quality Benchmark for Accelerators: The Global Accelerator Network

Feld Thoughts

Provide some sort of seed capital to their founders. Take a small amount of equity (usually ~6%) and overall have terms that are favorable to entrepreneurs. Accelerators business david cohen entrepreneur global accelerator network Seed money TechStars United States Venture Capital

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Convertible Debt: Worst Form Of Seed Financing — Except For All The Others

Gust

How to finance a new seed-stage startup? Equity? Convertible equity? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. Convertible equity eliminates that threat.

Raising Startup Capital Through Convertible Debt Financing

Business Plan Blog

Raising Seed Capital. Most startup founders do not have enough capital to launch their companies and need to raise money at some point. Raising Angel Capital. Various terms such as price cap, discount, conversion to equity, etc., 2) Giving equity in the company.

Rolling Closes Versus Synchronous Closes

Haystack

I have participated in many different types of seed rounds, but based on my experience of participating in over 100 seeds over the last 5+ years, I’d say the majority of those seed rounds (including around YC) were orchestrated by the founder to close on a specific date. Most of the rounds I participate in today are priced equity rounds. For any investor raising their own funds, you may have to chase down capital calls for each investment.

Exploring the NextView Platform? Start Here

View from Seed

Instead, if you’re a seed-stage startup taking that first step in anything (and at the seed stage, you’re going from zero to one in everything), it’d be great to have a place to go for support, inspiration, and practical resources to make the process easier and clearer. – Flowchart: Seed VC Decision Tree (how one seed investor gets to yes or no). – Checklist: Critical to-do’s immediately after raising seed capital.

Knowledge Is Power: Convertible Note Financing Terms, Part I

Gust

Experienced investors often don’t feel the need to involve legal counsel in most typical convertible debt seed or angel round investments. Another use of convertible note bridge financing is to make a quick injection of seed capital into a new startup when the investor and entrepreneur already know and trust each other; it’s better than a handshake, but far quicker and easier to complete than a real Series A round.

Keep Term Sheets Simple for Quicker Cash to Spend

Startup Professionals Musings

When a company is at its earliest seed stage, the terms tend to be the least complex. Define equity type. The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold.

Setting Up Your Accounting System

Feld Thoughts

When we were last with Dick and Jane on Finance Fridays, our fearless entrepreneurs were figuring out how to split up their founders equity and account for an investment from Jane. Anytime the financial model indicates that SayAhh will run out of cash, determine how you will raise capital to ensure liquidity and be sure to properly account for the debt or equity transaction on the balance sheet and Cap Table.

Keep Term Sheets Simple for Quicker Cash to Spend

Gust

When a company is at its earliest seed stage, the terms tend to be the least complex. Define equity type. The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold.

Quickly Unpacking Two Recent Acquisitions (of Cylance; of PlanGrid)

Haystack

venture capital to date (more on this in a separate post), unfortunately relegating billion-dollar exits as “ho-hum” events to the technology crowd. 4/ The Big Winners: Cylance raised around ~$280M in financing, with large equity stakeholders being Khosla Ventures, Fairhaven, and Blackstone. 1/ A Pre-Seed Reminder: According to Crunchbase, PlanGrid was founded and went through Y Combinator in 2012. The company only raised a bit over $1M as seed capital.

A Primer on Angel Investment ‘Simple Term Sheets’

Startup Professionals Musings

When a company is at its earliest seed stage, the terms tend to be the least complex. According to Attracting Capital from Angels by Brian Hill and Dee Powers, here are some key clauses that angel investors expect on the first term sheet for the investment you need: Set the price.

The Rise of Chinese Venture Capital – (Part 3 of 5)

Steve Blank

This post is about the rise of Chinese venture capital and how it helped build the countries entrepreneurial ecosystem. The Rise of Chinese Venture Capital. SBIR and STTR programs, the Torch Program’s funding for new ventures was limited to seed funding the front end.

Are You Waiting For Capital To Launch Your Startup?

YoungUpstarts

Most businesses – online or offline, need seed capital to get established and without access to these funds, launching a business can seem like an improbable dream. Unless your business idea is to launch an oil rig, you do not need huge capital investments.

The Rise of Chinese Venture Capital – (Part 3 of 5)

Steve Blank

This post is about the rise of Chinese venture capital and how it helped build the countries entrepreneurial ecosystem. The Rise of Chinese Venture Capital. SBIR and STTR programs, the Torch Program’s funding for new ventures was limited to seed funding the front end.

The Company Milestones Angel Investors Care About

Business Plan Blog

The most important principle of startup fundraising that every entrepreneur needs to know is: raise enough capital to achieve a set of milestones that will allow the company to attract the next round of investment. The Milestones Angel Investors Care About.

TinySeed Applications Open January 18th

Software By Rob

And in exchange for this $6k-$18k and mentorship, YC asked for 7% equity. We are happy to speak with you at any revenue level, but somewhere in the $150k-range is when founders may start to look for seed capital. Traditionally, venture capital has consisted of unicorn-hunting.

Stages of Social Enterprise Capital

Business Plan Blog

Survival or Establishment Stage: Once initial seed capital is drying up and no profit has yet been earned, the challenge for a social enterprise will be to expand the customer base and increase the market penetration while preserving capital.

How Crowdfunding is Affecting Angel Group Investment

Business Plan Blog

In September of this year, the SEC voted to overturn the ban on “general solicitation” that made it illegal for companies to publicly advertise that they are raising capital. Download our free Raising Capital from Angel Investors eBook.

How we changed the way the U.S. government commercializes science: Errol Arkilic — Part 1 of Episode 6 on Sirius XM Channel 111

Steve Blank

My guests on Bay Area Ventures on Wharton Business Radio on Sirius XM Channel 111 were: Errol Arkilic , former program director for the National Science Foundation Innovation Corps (NSF I-Corps), now founder of M34 Capital. government accelerator that takes no equity.

Knowledge Is Power: Convertible Note Financing Terms, Part II

Gust

In case it isn’t clear by now, angel investors aren’t in the business of making risky early stage investments in order to earn 6% interest on their money, or even 10%— the upside is all in conversion to equity—so the interest rate isn’t a major point of negotiation. Moreover, assuming an eligible equity financing takes place before the maturity date, the interest isn’t paid in cash, but rather is added to the principal amount of the note before converting it to equity.

Building a High-Tech Startup Team

Business Plan Blog

Aligning the Startup Team Strategy with the Capitalization Strategy. The single most important factor to raising capital for any tech startup is the management team. This is true for early stage funding as well as venture capital funding. Seed to Series A.

This Week in VC Episode 6 with @Jason Calacanis: Best One Yet

Both Sides of the Table

Next Wednesday we’ll have Dana Settle of Greycroft Partners, a New York / LA early-stage venture capital fund. But when the finally convert the debt to equity the round gets filed with the SEC and thus journalists often pick up on it.

Timing: When to raise seed funding.

Scalable Startup

Raising seed capital is a tricky business. Most are making major mistakes in their approach when seeking capital. High growth startup companies need seed money to get things going. Without seed funding most startups seeking high growth won’t make it.

Janvest Wants to Fill the Seed Investment Gap in Israel (Interview)

VC Cafe

A s venture funds struggle to raise money in Israel, seed capital, one of the earliest and riskiest stages of investment, is becoming harder and harder to secure. Janvest , a new seed fund of $5 million backed by American angel investors and chaired by the former head of the Mossad (Danny Yatom), saw an opportunity to fill the gap by making offering US-based angel investors the opportunity to tap into the Israeli startup industry.

The Summer of Initial Coin Offerings

Seeing Both Sides

Goldman Sachs and CB Insights recently reported that startups have raised over $1 billion in Initial Coin Offerings (ICOs) this summer — more than the total amount of venture capital raised during the same period. Need for growth capital.

Angel Investors vs. Angel Groups

Business Plan Blog

It is a high net-worth individual who invests his or her own money directly into promising startup businesses in return for mostly equity share of the company. The Angel Capital Education Foundation has three hundred American angel groups in its database, and they all come in many forms. The Angel Capital Association found that the median investment per round per angel group was about $277,000. Download our free Raising Capital from Angel Investors eBook.

The Fallacy of Channels: Startups Beware

Both Sides of the Table

The price points are not as high as your beautiful Excel spreadsheet had forecasted when you raised your seed capital. The sales market is as pure capitalism as it gets. In a world where we all raise less money we need to find more capital efficient ways of going to market.

How To Allocate Friends & Family Startup Capital

Business Plan Blog

How To Allocate Friends & Family Startup Capital. The most important principle of startup fundraising that every entrepreneur needs to know is: raise enough capital to achieve a set of milestones that will allow the company to attract the next round of investment. Below are the milestones that you will need to achieve in order to attract seed investors and therefore the milestones that you should invest your FFF capital.

The Summer of Initial Coin Offerings

Seeing Both Sides

Goldman Sachs and CB Insights recently reported that startups have raised over $1 billion in Initial Coin Offerings (ICOs) this summer — more than the total amount of venture capital raised during the same period. Instead I will make a few observations about how an investor might think about the impact of ICOs / token launches on the venture capital industry, in particular, and some of the downstream ramifications that need to wrestled with. Need for growth capital.

Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

An entrepreneur starts a company in classic " bootstrap " fashion - with a combination of sweat equity and their own financial resources. With this seed capital – more often than not totaling between $100,000 and $1,000,000 - the company accomplishes a number of key technical milestones, gets a beta customer or two, and then goes on a "road show" to venture capitalists around the country for capital to “scale” the business.

The New Reality of Entrepreneurship | WSJ.com

Campus Entrepreneurship

Lack of seed capital (home equity lines of credit, friends/family) is a major problem. (Is So uncertainty and lack of seed funding have led to fewer start ups and the ones that do start, are much leaner (no/fewer employees). Holy bad data Batman, and during Global Entrepreneurship Week! The Wall Street Journal covers data showing fewer new firms being created they are creating fewer jobs.

Why Startups Die

The Next Web

I have heard many founders — even in the first few months of product development — expect to raise seed rounds, pay themselves salaries, etc. It can be very tempting to take in a little bit of seed capital, and start to operate as if you’re a big company.

How to bootstrap a Startup with less than $10k

www.thestartup.eu

Posted by Stefano Bernardi On June - 21 - 2010 It’s a known fact that seed capital is very scarce in Italy. Sweat Equity: Juliette and Marco put in a bit of work during weekends as project managers, designers, developers, sysadmins, etc. TheStartup.eu

Think Your Start-up Is Venture Worthy? Think Again.

techcrunch.com

Researchers polled experts in lending, mezzanine capital, private equity, venture capital and private businesses themselves. Not a big shock, but things don’t look pretty, especially in the venture capital world.

Crazy! 189 Answers To The Top Startup Questions On Your Mind

maplebutter.com

When you are a young entrepreneur and you have a project (say a new age TV show) and you need to raise capital for the project. Other sources of capital. Ideally you can pay them based + equity so that you’ll get their attention and focus on the project. Maple Butter.