First Round Review has a great new post up titled What the Seed Funding Boom Means for Raising a Series A. The general idea is that the number of seed funding rounds is up 4x, but the number of Series A financings hasn’t increased, meaning a significant number of startups that were expecting to raise another round failed.
Here a few notes from the post:
- Just because it’s easy for some founders to raise a seed round doesn’t mean it’ll be easy to raise subsequent rounds
- Seed rounds are often raised based on the strength of the team and idea whereas Series A rounds are based on startup traction, and many startups don’t have strong enough metrics to warrant institutional funding
- One idea for seed-stage startups is to raise a larger seed round and/or make it last longer so as to provide more time to show results
- When raising a Series A, consider starting with a lower desired amount of funding, and, if there’s more demand than expected, raise the amount (it’s easier to go up than it is to go down after talking to investors)
- Metrics matter and entrepreneurs need to have a strong handle on the key drivers for their business (too often entrepreneurs wing it, especially when the startup is so young)
For entrepreneurs that have raised a seed round, What the Seed Funding Boom Means for Raising a Series A is a must-read.
What else? What are some more thoughts for entrepreneurs that have raised a seed round and are looking to raise a Series A?
David Cummings on Startups 