Seeking venture capital can be overwhelming. We will give you clear insights that will help you prepare and make the right decisions.
A seed round is an investment by an institutional investor, usually a venture capital fund.
These are sophisticated investors and are usually focused only on certain sectors; at times, they have a strong tech bias.
Seed investors at times prefer a clean cap table and investing in companies that have not raised an angel round, as they
may not want the founders paying heed to many voices. Having said which, smaller seed funds have also been known to
co-invest along with angel networks. The ticket-size of the seed investment usually ranges between USD 0.5 – 1.5
million and the seed investor usually takes a shareholding that may range between 10 – 20%.
The seed investor usually invests in companies that have customer validation or a product already in the market. They
typically conduct a legal and financial due diligence to identify clean-ups that need to be completed before they invest.
There are also considerable reporting obligations placed on founders, post the investment.
Being an institutional investor, the seed investor would drive the deal documentation and would insist on a few points
like affirmative vote matters and liquidation preference. There may be items that founders may push back on, such as
liability and operational control.
Our team has experience in advising on seed investments in SaaS, B2B e-commerce, healthcare, electric vehicles,
recruit-tech, agri-tech and fintech companies. We have represented both sides – the seed investor as well as the
investee company – equally.
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Still have questions?
Series A Onwards
If the start-up has reached this point, the odds of success have already improved considerably.
The main difference from the seed round is the amount of money involved and the nature of risk. Funds focused on
early-stage investments enter at the seed stage and investors who have a lower risk appetite enter at this stage, in ticket-sizes
usually exceeding USD 7.5 million.
The Series A investors are more focused on the return and more hands-on in the operations, as opposed to early-stage
investors. They typically wait until the start-up has demonstrated a viable business model with strong growth potential.
Our Founder has experience in advising on Series A and B investments and on subsequent exits from companies engaged in print media, microfinance, hospitals and pharmaceuticals.
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