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A Guide to Seed Fundraising

Here’s Y Combinator’s Guide to Seed Fundraising

There are so many questions involved when raising funds.

❓ How much should I raise?

The goal should be to raise as much money as needed to get to your next “fundable” milestone. If you can manage to give up as little as 10% of your company in your seed round, that is wonderful, but most rounds will require up to 20% dilution and you should try to avoid more than 25%.

❓ How many months of runway do I need?

12-18 months is considered a good default runway for most seed-stage startups. This gives your startup about 12-15 months to reach key milestones and another 3-6 months to raise your next round of funding.

❓ SAFE/Convertible Notes vs. Priced Round?

Convertible instruments can be a good option for founders who need capital and want to fundraise quickly, but also want to reach certain company milestones before doing a priced round. On the other hand, priced rounds are great for founders who are confident in what their company is worth, expect impressive growth, and need to raise a lot of capital.

The President of Y Combinator, Geoff Ralston, created an amazing guide that sheds a light on these topics. A must-read for anyone interested in raising funds.

It covers:

🔸 Financing Options

🔸 Convertible Debt, SAFE, & Equity

🔸 Valuation

🔸 Pitching

🔸 And even the documents you’ll need.

Fundraising is a necessary, and sometimes painful task most startups must periodically endure.

The full guide is inside our Sales & Investor Accelerator Club. Join us here!

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