That's actually really hard. Funds sometimes take 1+ years to raise, and then they can invest over a period of 2-4 years with capital committed for 10 years. Hard to time that
Big advances take time. I'm thrilled that Dustin and Founders Fund are willing to take on investments that have a long time horizon. That's where big breakthroughs will come from.
From starting to pitch to investors/angels to closing the round and receiving the money, how long did it take you? Note this is for smaller seed rounds (<500K), not series A.
I basically want to know how quickly it can be done, but realistic.
So this is a little bit "in the weeds" but with the seed round closing back in July for $1.5 million why such a short turnaround for the series A? Is this normal? Considering it probably takes at least a month to close out a round does that mean GitLab went back out to fund raise only a month after their $1.5 million investment?
Not trying to be critical or anything I'm just really curious.
I think he means that more money is spent on seed-stage deals than on Series A deals.
With seed deals being much smaller than Series A deals that definitely has implications (e.g. there probably will not be enough money around to get a Series A for all those Seed funded startups that get to that next stage)
There is no series A crunch, only too many seed rounds IMHO.
Very few companies need to raise more than $1M to reach profitability any more, so traction should be required before raising money, but if investors wait for traction, they'll miss the really big deals. This sets up a dynamic, particularly influenced by the JOBS act, where unsophisticated investors can flood the market with cheap capital.
When it comes time for a startup to raise money from serious investors, they won't touch it unless it looks like Midas. I'd argue that the Series A levels haven't really changed from year to year, but that we perceive it as a Crunch because of the ridiculously large number of seed rounds.
Is there actually a technical distinction between a Series A and a seed round? (I've always assumed it was just size and order of progression.) Their last funding was already $1 million, so wouldn't this be more like a small Series B?
Interestingly, more than a handful of the funds listed in the list of zombies are life science and healthcare-related funds.
As someone running a biotech startup, this is rather relevant to me...
It occurs to me that the cutoff of 6 months since last round may be a bit short for the life science world, where funds tend to make fewer, bigger investments with lower frequency.
It's also interesting to note that a few strategic venture funds are listed (Novartis stuck out at me) and that these guys might not fit the same mod, given that they invest with eye on relevance to the mothership.
With those two caveats in mind, there are also some indicators to suggest that early stage investing in biotech/life-science startups has been slowing down over the last few years. There was a big of a boom prior to this, but it's fairly widely acknowledged that there haven't been good returns for the billions of dollars poured into early-stage biotech companies. There's now a bias toward larger series A's on slightly lower risk startups...
I am not sure if the last chapters of "The hard thing about hard things" or "Venture Deals" had more details.
So you can expect Series A with fresh funds and money (10 years runtime left).
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