A Few Thoughts On Timing and Staging Of Capital Into Modern Tech Startups

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@pmarca Says

A few thoughts on timing and staging of capital into modern tech startups. Start with the fact that 2003-20011 seed rounds were ~$500K-1M. As points out, now you see more startups raising $2-3-4M or even more in “seed” financing, often in multiple tranches. So then, think about the startup that’s raised $3-4M or even $5-6M in “seed” funding that goes to raise a “Series A” from VC firms.

Venture capitalist looks back across the table: “You’re not raising a Series A, you’re raising a Series B. You already raised your Series A [in seed $]”. This can take the startup by surprise, because it really affects how VCs think about progress and milestones, is key to raising new round. VC’s assume Series A is to build, product and get first beta customers; Series B is to build the business around the product and get to revenue.

So a…

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