Should you Raise a Seed+ Round?

Should you Raise a Seed+ Round?

January 8, 2020 by investor

Today, we’ll talk about whether you should be raising a Seed+ round.

In startup funding, you raise funding in stages. There’s the seed stage, when you have developed the product to some level and potentially have some users. Startups typically raise $500K to $750K for this round. You don’t want to raise more at this stage if you can help it, as you’ll be giving away too much equity due to your low valuation.

The next raise is the Series A raise, where you typically have an annual revenue run rate of $500K or more. At this point, you can raise $1.5M to $2M – or perhaps more if your growth rate justifies it.

If you find your startup has raised a Seed round but is not quite ready for a Series A, then you may want to consider a Seed+ round. A Seed+ round is essentially another raise at the Seed level, usually with the same terms.

The key to remember here is that each round of fundraising brings dilution, and too much fundraising will become a problem later.

Thank you for joining us for the Startup Espresso where we help startups and investors connect for funding.

Let’s go startup something today!


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Copyright (c) 2020, Hall Martin and investorconnect.org. All rights reserved.

Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.

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