Sep 28, 2020
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
When I ask startups how much they are raising for investment, they often quote their total raise for the life of the startup.
We then talk about breaking the raise into smaller rounds so the founder doesn’t have to spend too much time on the fundraise process.
Here’s some guidance on how to breakdown your startup fundraise into tranches or what some call rounds.
Family and Friends
funding: $10K to $100K
This helps set up your legal entity,
intellectual property, and basic prototype.
Pre-seed:
$250K
This raise is for
the initial research and beta product development.
Seed: $500K to
$750K
This raise is for
building out the product and closing initial customers.
Seed +: $500K to
$750K
This raise is for
growing the sales and establishing repeatable sales and marketing
processes.
Series A: $1.5M to
$3M
This raise is for
growing your sales up past the $1M annual revenue.
Series B: $5M to
$15M
This raise is for
growing your sales up past the $3M annual revenue.
If you raise too much money too
early in the life of your startup, you will find yourself giving
away too much equity so it’s important to raise in
stages.
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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