Back to feeds

Less than 1% of companies secure venture capital 💔—and even among those that do, many struggle to raise a second round. After reading Lenny Rachitsky’s latest article on raising Seed rounds, I wanted to distill the most valuable insights from top founders like those behind Notion, Figma, and Ramp. Here’s what I found 👇 Raising a Seed Round 101: Key Takeaways from Top Founders 1. Why Raise a Seed Round? - Scale: Build a large, enduring company. - Control: Be comfortable with 10%-20% dilution and external input. - Funding: Secure capital to develop a competitive product or scale faster. 💡If you don’t need VC, don’t raise too early—focus on profitability. —Jason Fried, 37signals 2. What to Prove Before Raising? - Commitment: Be fully dedicated to your startup. - Customer Validation: Talk to at least 30+ SMB or 100+ consumer customers. - Insight: Show a unique vision and execution ability. 💡Ensure 40% of customers say “Wow!” when they see your product. —Tomer London, Gusto 3. How Much to Raise? - Typical Seed Rounds: $1M–$4M, with 24-36 months of runway. - Valuation: ~$20M post-money is common. - Dilution: Expect to sell 15%-20% equity. ✅ Better to be oversubscribed than to aim too high. 4. How to Maximize Fundraising Success? - Create FOMO: Schedule investor meetings within 2-3 weeks. - Build Social Proof: Secure angel investors before targeting bigger funds. - Powerful Introductions: Warm intros from influential founders or investors matter. 💡Mystery is powerful—never reveal all your investors until term sheets are signed. —Siqi Chen, Runway 5. Choosing the Right Investors - Alignment: Look for investors who share your vision and add value beyond capital. - Long-term Partnership: Treat investor selection like hiring a key team member. 💡Trust matters. Choose investors who genuinely care about your business. —Mathilde Collin, Front 6. Should You Announce the Raise? - Pros: Enhances credibility with customers and helps with hiring. - Cons: Alerts competitors and attracts VC interest in similar startups. 💡Announce only if it helps solve current challenges. —Josh Miller, The Browser Company