In startup funding, the raises come in rounds.  

The startup can raise a pre-seed round followed by a seed, then a Series A, Series B, and so forth.

Many founders view this approach as one step after the other.

The reality is there’s a large gap between the Seed and the Series A.

Some call this the Valley of Death.

This occurs because the startup often moves from family and friends and angel funding to institutional investors.

The gap is wide between the two investor types.

The funding reality is closer to Seed Seed+  Seed++ another $250K bridge round and then Series A.

One strategy is to find bigger and more lucrative customers as you move through the series so you can generate more revenue.

This reduces the amount of funding required to reach the next level.

Another strategy is to factor this many rounds into your fundraising strategy from the start.

Consider the valley of death and how you will cross it with your fundraising planning.

 

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

Let’s go startup something today.
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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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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.