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Less than 1% of companies raise venture capital ?? Of the ones that do, many struggle to raise a second round. I came across last article of Lenny Rachitsky about raising Seed rounds and I thought it would be very valuable to gather the most important insights ?? Raising a Seed Round 101: Key Insights from Founders of Notion, Figma, Ramp, and More: 1. Why Raise a Seed Round? Scale: Aim to build a large, enduring company. Control: Comfortable with 10%-20% dilution and external input. Funding: Need external capital to build a competitive product or scale faster. Key Insight: If you don’t need VC, don’t raise too early—focus on profitability. —Jason Fried, 37signals 2. What to Prove Before Raising? Commitment: Fully dedicated to your startup. Customer Validation: Talk to potential customers (30+ for SMB, 100+ for consumer). Insight: Demonstrate a unique vision and the ability to execute. Key Insight: Ensure 40% of customers say “Wow!” when you present your product. —Tomer London, Gusto 3. How Much to Raise? Typical Seed Rounds: $1M–$4M, aiming for 24-36 months of runway. Valuation: $20M post-money valuation is typical. Dilution: Expect to sell 15%-20% of the company in a seed round. Tip: It’s better to be oversubscribed than to aim too high. 4. How to Maximize Fundraising Success? Create FOMO: Compress investor meetings into a 2-3 week window. Build Social Proof: Secure angel investments before pursuing bigger funds. Powerful Introductions: Warm intros from influential founders or investors increase your chances. Key Insight: Mystery is seductive—never reveal all your investors until term sheets are signed. —Siqi Chen, Runway 5. Choosing the Right Investors Alignment: Look for investors who share your vision and will add value, not just capital. Long-term Partnership: Treat investor selection like hiring a key employee you can’t fire. Key Insight: Build trust. Choose investors who genuinely care about your business. —Mathilde Collin, Front 6. Should You Announce the Raise? Pros: Boosts credibility with customers and helps with recruiting. Cons: Alerting competitors and triggering VC interest in similar startups. Key Insight: Announce only if it helps solve current challenges. —Josh Miller, The Browser Company - Share this with other entrepreneurs if you found it valuable!
Love this! Particularly #5! Agree with #6 - share only if you have to! Great share! Guillermo Flor ! Thank you! ????
“$20M post-money valuation is typical.” Id say that’s on the high end of what I’m seeing. Would say $12-20M is typical these days. Peter Walker probs has the best data on this
Pretty insightful,thanks Guillermo Flor
Great post. Let’s connect offline, would like to share some more insights on this. ??Guillermo Flor
Will keep that in mind. But how to find investors?
Founders wirh previous proven success or with the right connections are at the highest advantage. I know this is disheartening , but that actually makes the Math for others more outlandish. I would say " Ask yourself if you are Unreasonable. Crazy some will say. Are you unwilling to leave the world as it is, knowing what you can do?" Success, I highly believe, requires undefeatable self confidence. It comes to the man or woman who shouts back at 10 million people " I am right! The world is round." Or at 8 billion people " I am going to do what NASA cannot." 'The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.' -George Bernard Shaw
Co Founder Metvy, The VC Fellowship & CMO Fellowship |TEDx Speaker
4 个月Highly informative! Your posts always provide value. Thanks for sharing Guillermo Flor !