The key considerations for how much to raise in a seed round are:
- What are the milestones? (e.g. MVP product, iterate with early customers, early team count and makeup)
- Working backwards from there, what will you need to do it? How much runway?
- What do you need from the funds / angels in the round? (e.g. intros, access to portfolio companies, expertise)
- What similar deals are being made and what are those terms?
- What are the additional expenses or timelines that are needed for the product? (e.g. manufacturing, inventory, professional service fees)
Links to this note
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Be Upfront With Seed Investors About Bringing on Another Co-Founder Later
Seed investors are primarily evaluating the team and the space in order to make an investment decision. Having an unknown co-founder they would need to work with in the future is a red flag. If you still intend to do that, be up-front and work closely with them in finding the right person. This is important for dilution in future rounds. You want your investors to share in the dilution if you bring on a co-founder later with material amounts of equity instead of diluting just the current founder(s) share.