Your current fundraising round not only decides how much equity you get to keep, but also the runway life for your startup. Getting it wrong can cost you money, share in the market, and most importantly — momentum.
How do you get the fundraising done right? Components include size of the round, timing, investor interest to maximise the capital you are about to raise, whilst at the same time minimising equity you give away.
No investor is the same. Your strategy should shift including the stage your startup is currently the part of. The early rounds (pre-seed, seed, series A) should focus on your company's vision and its storytelling, while the later-stage rounds should prioritise efficiency.
For a quick overview:
Pre-seed funding.
Series A focuses on monetization.
Series B supports scaling.
Series C funds expansion or acquisitions.
Fundraising requirements per stage
Seed stage
Startups in the (pre-)seed stage typically raise between $500k and $5M, with a median falling on $3.4M. At this stage, funding is used for
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