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fundraising

Seed Round

First institutional funding round.

The Seed Round is the first significant funding round for a startup, usually after pre-seed (friends & family). It funds the search for product-market fit, initial hires, and product development. Amounts typically range from $500K to $3M, with valuations of $2-10M.

Concrete Example

A startup raises $1M seed at a $4M pre-money valuation.

Founders give up 20% dilution ($1M / $5M post-money).

Tips

  • Have 18+ months runway after seed
  • Prepare clear metrics (MRR, churn, CAC)
  • Meet VCs 6 months before raising
  • The lead investor structures the round

Common Mistakes

  • Raising too little (runway < 12 months)
  • Raising too much (dilution > 25%)
  • Not having a lead investor
  • Ignoring term sheet terms

Related Terms

PRE SEEDSERIES ATERM SHEETVALUATIONDILUTIONCAP TABLE

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