Seed fundraising is rarely easy, but it certainly used to be a lot less complicated than it is today. In a simpler world, a seed investor (or maybe two) would lead a round, which meant that they would write the terms of the deal in a term sheet and then pass that document to their friends to flesh out the funds and eventually close the round. That universe of investors was small and (unfortunately) often cliquish, but everyone sort of knew each other and founders always knew at least who to start with in these early fundraises.
That world is long since gone, particularly at the seed stage. Now there are thousands of people who write checks into the earliest startup venture rounds, making it increasingly challenging for founders to find the right investors. “Pre-seed,” “seed,” “post-seed,” “seed extension,” “pre-Series A” and more terms get batted about, none of which are all that specific about what kinds of startups these investors actually invest in.
Worse, obvious metrics in the past that helped stack-rank investors — like size of potential check — have come to matter far less. In their place are more nuanced metrics like the ability to accelerate a deal to …read more