Fundraising Strategy for Early-Stage Startups (№2 of Series)

Basic Understanding Before Fundraising — Angel Investors

Photo by Tom Adams on Unsplash

This is the 2nd article in the early-stage startup fundraising strategy series. You may find the links of related readings at the end of this article.

My first article under this series of “financing strategy for early-stage startups” starts with institutional investors’ introduction as they are the main type of investors startups work with in fundraising. However, when startups do fundraising, their first-round is not always led by institutional investors like VC firms or accelerators. On the contrary, the angel round or pre-seed round fundraising will likely be led by individual investors, namely angel investors. According to Pitchbook (PitchBook), majority pre-series A deals that have taken place in H1 2019 is angel round financing (refer below).

1. Angel Round vs. Seed Round

The difference between the angel round and seed round is mostly about the funding size. Pitchbook indicates that in H1 2019, the median financing amount of angel round is $0.6 million while the median size of…