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Ask HN: What exactly is seed vs. series A-F vs. Debt vs. other kinds of rounds?
Hi
is there a resource that can help a first time founder get clear picture on various rounds of fund raising?
Some people mentioned that it not necessarily a good thing if a company has raised money beyond series D. Most startups are expected to turn profitable by that round. Is it true?
Thanks !!
- 27182818284 12y agoYes, http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist/dp/1118443616 http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis... By no means is that complete, but that should give you a primer, and I learned about it from other startups that successfully have raised funds. (I was in the dark too at a point. https://news.ycombinator.com/item?id=4064276 https://news.ycombinator.com/item?id=4064276) The other big thing is just to get out and talk with other founders near you. I found (at least in our community) they were very willing to share information over a beer or soda.
- tptacek 12y agoIt seems like a good general rule of thumb that firms that raise B+ rounds are either (a) capable of flipping a switch to become pro-forma profitable or (b) extraordinary, with demonstrable traction backed by something more than a story. It's tricky to reason about profitability in startups, because most "successful" unprofitable startups choose not to be profitable, usually in order to buy further market share. The big difference between a seed round and an A-round in practice seems to be that valuations for seed rounds are usually casual (and sometimes nonexistent, deferred to the A round), and A-rounds always come with a valuation. Generally, a seed and (sometimes) an A round are things you could imagine getting without being in immediate striking distance of real profitability.