Types of Fundraises

The Various Types of Fundraises

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

, , , , ,
Previous Post
Deal-Flow is Crucial, but Where to Get it?
Next Post
Building Investor Engagement

Related Posts

Are you Ready for a Series A Fundraise?

1 min read Are you considering launching a Series A fundraise? For startups not requiring FDA, you will need the following before starting a Series A: A product with revenue preferably above $500K/year A growth plan to reach $10M annual…

Top 10 Texas Big Data Ventures from 2016

Big Data continues to see strong growth.  In 2015 there 462 deals funded at $5.6B. Big Data companies in Texas raised $284M in 2016.   Of the top 10, Austin has 6 companies totaling $210M as follows: Company Name Total…
OLYMPUS DIGITAL CAMERA

The Top Ten Fintech Investors in Texas

The top ten fin-tech investors in Texas include Austin Ventures, Seven Rosen Funds, Houston Angel Network, Mercury Fund, Mark Cuban, Silverton Partners,TPG (formerly Texas Pacific Group), Texas Venture Labs, Maverick Capital and Capital Factory. These companies have invested in over 1,362 deals collectively.…