Types of Fundraises

The Various Types of Fundraises

Fundraising

1 min read

A common misconception among startups is that when they are looking to raise for investment, they have the total raise for the life of the startup in mind. It’s a big picture way of viewing things, when in actuality, it is better to look at the chapters rather than the whole story.

Approaching the investment, the startup needs the total sum in mind. In many ways, it is biting off more than you should be chewing at the time. A bit more focus here is vital.

The ideal way to approach raising for investment is by breaking the raise into smaller chapters and smaller bites, which means focusing on smaller rounds. By doing this, the founder no longer has to spend an excessive amount of time on the fundraise process.

There are some things to consider when breaking the raise down into rounds. Below is a guideline on how to break up a startup fundraise into tranches. 

Family and Friends Funding

$10k to $100k

Pre-seed

$250k

Seed 

$500k to $750k

Seed +

$500k to $750k

Series A

$1.5M to $3M

Series B 

$5M+

When going through these rounds, it’s essential to know that if you raise too much money, too early in the life of your startup, you will find yourself giving away too much equity. To avoid giving up too much equity, stick to raising in stages.

Read more: https://tencapital.group/education


Hall T. Martin is the founder and CEO of the TEN Capital Network.TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

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