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In This Edition:
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VC INSIGHTS
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Is Your Startup
Ready for a Seed
Round?
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Raising a seed
round is a crucial
step for startups,
typically
involving raising
between $1 million
to $4 million to
support
early-stage
growth. This
funding stage is
essential for
transforming an
idea into a viable
business, and it
often includes
various types of
investors such as
angel investors,
seed funds, and
venture capital
firms.
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Key
Considerations
for Raising a
Seed Round
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-
Understanding
Seed
Funding: Seed
funding is
the initial
capital
raised by
startups to
develop
their
product and
validate
their
business
model. It
can come in
the form of
equity or
convertible
securities
like SAFEs
(Simple
Agreements
for Future
Equity) and
is generally
used for
product
development,
hiring,
marketing,
and
operational
costs.[Link]
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Preparation
and
Strategy: Founders
should have
a clear
strategy in
place before
approaching
investors.
This
includes
building a
robust
investor
list,
preparing
necessary
documentation,
and creating
a compelling
pitch deck
that
outlines the
business
model,
market
opportunity,
and
financial
projections.[Link]
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⏳ Timeline
for
Fundraising: The
process of
raising seed
capital can
take
anywhere
from three
to nine
months. A
common
approach is
to spend one
month
preparing,
three months
actively
pitching to
investors,
and one
month
closing the
round.[Link]
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⏳ Investor
Composition: Most seed
rounds
consist of a
mix of
larger lead
investors
and smaller
angel
investors or
funds. It’s
important to
choose
investors
who not only
provide
capital but
also add
strategic
value to the
startup
through
mentorship
or industry
connections.[Link]
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Dilution
Considerations: Founders
should aim
for around
20% dilution
during their
seed round,
with a
typical
range being
15% to 25%.
This
dilution
reflects the
percentage
of ownership
that
founders
give up in
exchange for
investment.
-
Types of
Investors: Seed
funding
sources
include:
-
Angel
Investors:
Wealthy
individuals
who
invest
their
own
money.
-
Seed
Funds:
Specialized
funds
that
focus on
early-stage
investments.
-
Venture
Capital
Firms: Some
VC firms
participate
in seed
rounds
but
often
prefer
companies
with
more
traction.
-
Accelerators/Incubators:
Programs
that
provide
funding
along
with
mentorship
and
resources.[Link]
-
Best
Practices:
-
Build
relationships
with
potential
investors
well
before
the
fundraising
process
begins.
-
Communicate
regularly
with
updates
about
company
progress.
-
Be
prepared
for due
diligence
and
negotiation
once you
receive
interest
from
investors.
-
⚠️ Common
Challenges: Startups
often face
difficulties
in proving
their market
viability at
this stage,
as many are
still in the
process of
developing
their
minimum
viable
product
(MVP) or
gaining
initial
traction.[Link]
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By understanding
these components,
founders can
better navigate
the complexities
of raising a seed
round and increase
their chances of
securing the
necessary funding
to propel their
startup
forward.
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Navigating the
venture capital
landscape is
tough, but with
the right
approach, it can
set your startup
up for success. If
you’re preparing
for a seed round, check out the
valuable
resources
below
for expert
insights and
strategies to
secure funding and
propel your
business forward.
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-
A Guide to
Seed
Fundraising
(Link)
-
Raising a
Seed Round
101 (Link)
-
Seed
Funding
for
Startups:
Our
Complete
Guide (Link)
-
How
Startup
Fundraising
Works (Link)
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Carta's First
VC Fund
Performance
Report is Here –
Surprising
Insights
Await!
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Carta's Q1 2024
VC Fund
Performance Report
examines the
challenges facing
venture capital
markets due to
rising interest
rates since 2022.
Fundraising has
slowed, liquidity
has decreased, and
competition for
limited partner
(LP) funds has
intensified.
The report, based
on data from 1,803
U.S. venture funds
managed through
Carta, focuses on
small funds and
direct venture
investors from
2017-2022.
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It aims to
provide greater
transparency in
assessing VC fund
performance,
particularly for
funds over $100
million.
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Key
Insights:
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Slow
capital
deployment:
Funds in the
2022 vintage
have
deployed
about 43% of
their
committed
capital at
the 24-month
mark, the
lowest share
of any
analyzed
vintage.
Prior
vintages
ranged from
47%-60%
after 24
months.
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Graduation
rates
declining:
30.6% of
companies
that raised
a seed round
in Q1 2018
made it to
Series A
within two
years. Only
15.4% of Q1
2022 seed
startups did
so in the
same
timeframe.
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Distributions
back to
LPs remain
elusive:
Less than
10% of 2021
funds have
had any DPI
after 3
years.
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Unlock deeper
insights into the
shifting landscape
of venture capital
by downloading Carta's Q1
2024 VC Fund
Performance
Report. Dive into key
data from 1,803
U.S. venture
funds, uncover
performance
trends, and learn
how small funds
are navigating
fundraising
challenges amidst
rising interest
rates.
Whether you're an
LP, a fund
manager, or an
investor, this
report offers
essential analysis
to help you make
informed
decisions.
Don't miss
out—download the
full report
now
to stay ahead of
the curve!
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VC Fund
Performance
report.pdf
4.98 MB •
PDF File
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Download
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-
How US
Startups Are
Securing
Seed Rounds
in 2024 (Link)
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JPMorgan’s
Perspective:
Why ‘Founder
Mode’ Isn’t
Enough to
Build a
Billion-Dollar
Business (Link)
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Who Should
Advise
Entrepreneurs?
Vinod
Khosla’s
Take on
Expert
Guidance (Link)
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Vinod
Khosla
on
How
to
Build
the
Future
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-
How to
Become Your
Own Niche: 4
Powerful
Steps for
Personal
Branding (Link)
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How to
Avoid Common
Legal
Pitfalls
When
Planning
Your
Business
Exit (Link)
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10 Minutes
of
Game-Changing
Entrepreneurial
Advice from
Sabastian
Enges (Link)
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Is Passion
Enough to
Succeed?
Alexis
Ohanian’s
Bold Take on
Entrepreneurship (Link)
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What It
Takes to
Turn a
Fintech Idea
into
Reality:
Adam
Sharpe’s
Journey (Link)
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Leading
with an
Entrepreneurial
Mindset: How
to Innovate
and Inspire (Link)
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Surviving
AI’s
Disruption:
What
Entrepreneurs
Need to Know (Link)
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What Does
It Take to
Build a $1M
SaaS in 3
Months? (Link)
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I
Built
A
$1M
SaaS
In
87
Days
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From
Network
Stress to
Network
Success: How
AI Is
Transforming
Wireless
Systems (Link)
-
Amazon
Unveils
Project
Amelia: The
AI Assistant
That’s
Changing the
Seller
Landscape (Link)
-
Alibaba's
Latest AI
Models:
Transforming
Text into
Video with
Cutting-Edge
Technology (Link)
-
YouTube
Announces
Exciting New
Features for
Creators in
2024 (Link)
-
Google
Unveils AI
Funding
Initiative
to Empower
Schools and
Classrooms (Link)
-
Northwestern
University
Launches
Groundbreaking
AI Research
for
Astronomy
with $20
Million
Grant (Link)
-
Global
Leaders to
Gather in
San
Francisco
for AI
Safety Talks
After U.S.
Election (Link)
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Snap's New
AI Tool
Makes Video
Creation
Easier for
Creators (Link)
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-
Fathom
Raises $17
Million
to Improve
AI-Powered
Note-Taking (Link)
-
AI Media
Platform FÁL
AI Gets $23
Million
from a16z
and
Investors (Link)
-
AI Platform
WeGrow
Secures €7M
to Simplify
Business
Innovation (Link)
-
Jus Mundi
Raises $22
Million
to Advance
Legal
Research
Technology (Link)
-
AI Startup
Raises Funds
to Simplify
Gig Worker
Hiring (Link)
-
Timefold
Raises €6
Million
to Improve
Planning
Optimization
Software (Link)
-
Financial
Services
Startup Knit
Raises $9
Million
in Latest
Round (Link)
-
Cudis Gains $5
Million
to Enhance
AI-Powered
Wearable
Health Ring (Link)
-
ContextSDK
Raises $4
Million
to Empower
Developers
with New
Tools (Link)
-
Rep AI
Gains $7.5
Million
to Develop
AI-Powered
Digital
Sales
Representatives (Link)
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NEW JOBS
|
36 Remote Job
Opportunities at
Startups
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Explore exciting
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36 innovative
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With small teams
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move!
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Some jobs might
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restrictions, so
be sure to review
the details.
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Ready to find
your next
remote
opportunity?
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Check out
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your perfect fit!
Don’t wait—start
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career.
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