Fundraising Strategy for Early-Stage Startups (№1 of Series)
Basic Understanding Before Fundraising — Institutional Investors
This is the 1st article in the early-stage startup fundraising strategy series. You may find the links of related readings at the end of this article.
Startups who seek seed or series A financing may feel overwhelmed. Unlike series B or future fundraising, founders may not yet be familiar with the VC circle or the process of fundraising. According to Crunchbase, there are hundreds of venture funds formed every year in the U.S. This hasn’t included USD funds or corporate venture capitals headquartered outside the U.S. but many still are interested in U.S.-based startups.
It is critical to understand the VC market and financing dynamic to get a sense of who may be potential investors for your startup. This article will highlight the main factors and illustrate some examples that may distinguish investors’ investment activities from each other.
1. Financing types: equity, debt, or (even) token
Corporate financing for startups in series seed or series A are mostly dealing with equity financing, which means investors invest cash in your startup for the consideration of the startup’s shares, turning investors…
