Anatomy of Seed

Note: This originally appeared 4 years and almost 25K views ago on Quora. But it’s still something we dive into in sessions with Accelerators. So as we kick off Pitchcraft on Medium, it’s worth including here. Enjoy.

To read more like this, subscribe to Pitchcraft above. If you’re at the stage where you’re putting your pitch together, I’ve assembled a bunch of slide templates to help, at Pitch Patterns. Rock, rock on.

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We recently mapped Appmakr’s seed round, to reveal the network path they took to raise $1M from 14 top investors.

See it at http://slidesha.re/k8ytrZ (slideshow). Check out AppMakr at http://appmakr.com. They rock.

What We Found

- Appmakr dealt with 170+ actors, including VCs, angels, seed funds, middlemen, corporates and even an angel group.

- They were rejected 130+ times, but raised $1M from 14 top investors.

- Seed funds committed the most $ per contact, by far ($12K+). They were also slowest to reply, by far (almost 30 days avg).

- AppMakr used tools like AngelList. Here it was 3X more efficient than traditional fundraising methods.

- They were far more successful with in-person pitches (avg of $11K) than phone ($3K) and email (<$2K).

- There were three distinct groups. The Old Style relied on propagation through interpersonal networks. The New Style used tools like AngelList to reach investors more efficiently. Time Wasters consumed resources with intros that went nowhere. The differences in behaviour were stark.

What does this mean for startups and investors?

What it Means for Startups

- Be ready for the grind, and avoid low activity points in the year.

- A large amount of your funds may originate from a few people. These are your super nodes. Support them and push them.

- A large number of intros may lead nowhere. Don’t invest much in these intros.

- Use tools when it makes sense (AngelList, Techcrunch Disrupt, Launch, etc).

- Get used to being public about your traction and raise details.

(See Daniel’s own takeaways on his blog at http://www.danielodio.com/2011/0..., including a nice top 3 lessons video with us both)

What it Means for Investors

- The market for early stage funding is becoming more efficient. Market intermediaries are emerging. How can you exploit them?

- Proprietary dealflow is declining as a driver of returns.

- Advisory support is becoming more important than connective support.

- Reputation and specific value add is more important than ever.

See it for Yourself

See the full map at http://brendanbaker.co/anatomy.pdf [UPDATE: no longer active link] (pdf). It looks like this but much bigger:

And then check out the spiffy slideshow that explains it all. It can be found athttp://slidesha.re/k8ytrZ and looks like this:

Check them both out and please leave your thoughts in the comments.

B

(Many thanks to Marc Ventresca, Daniel Ruben Odio-Paez, Ming Yeow Ng, Naval Ravikant, Chris Wake, Brandon Trew and Michael Aiello for feedback and ideas on the project.)