4 ms·
> Anyone have any advice on raising enough on the seed round to match your needs without having to create an absurd valuation that will crunch you in A? Grow e
by austenallred 11y ago
> Anyone have any advice on raising enough on the seed round to match your needs without having to create an absurd valuation that will crunch you in A?
Grow extremely quickly by doing everything else right? There's really no shortcut or trick, that's just what it takes.
To raise <$1 million and be ready for a Series A is just brutally difficult. For example, my brother just raised his A and he said investors were looking for a $1.5 million run rate and 3-4x YOY growth. So in ~18 months with ~5 people you'd have to build product, make that many sales and still have compounding growth.
That's set up to find the companies that are doing extremely well. It will happen, but that's not something you can really brute force (it didn't happen to my company, even though we're on a very promising trajectory).
Now, say you raise a $2m seed extension. That gives you an additional ~18 months to hit those same metrics, while hiring a couple more people. That's just so much more doable. Especially considering most first-time founders (myself included) spend the first six months making mistakes around building the right team. (One way to help make it to a series A on your seed is to have all the people you want/need ready to be plugged in.)
I think either the Series A expectations will come down slightly or "seed prime" rounds will become the norm, as they already are becoming. Not many are ready to go to the NBA after playing in High School. Simple as that.