Funding Overview

Below is a quick guide to the different types of capital raising that are typically used by startup companies.

• • Pre Seed – the earliest stage of funding, this capital is usually provided by the founders themselves, as well as friends and family.  The goal is to raise enough money that will enable the company to create a minimum viable product or otherwise validate their business idea.  The amount raised is usually $50,000 to $250,000.
  • Seed – seed founding is for companies that have already validated their value proposition. Typically, the company will have consistent monthly revenue and sales are increasing every month.  Most series A investors are early stage venture capital funds or angel investors.  The amount raised is typically in the range of $500,000 – $2M in exchange for 10% – 20% equity in the company.   
  • Series A – only 10% of the companies that raise a seed round are successful enough to make it the next step, a Series A round of funding. Typically, Series A rounds raise approximately $2 – $15 million. Investors come from more institutional venture capital firms and often work in groups, with one firm acting as the lead investor, with the others as capital contributing partners.
  • Series B – at this stage, the product or service is already being sold in the market. The average amount raised in a Series B round is $32 million and the average company valuation is $58 million.
  • Series C – this is usually the last stage of fundraising before an IPO