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The fundraising stages are not about dollar values — they’re about risk

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For a rapid valuation climb, think, ‘What’s the highest risk right now, and how do I remove it?’

You’ve likely heard of pre-seed, seed, Series A, Series B and so on and so forth. These labels often aren’t super helpful because they aren’t clearly defined — we’ve seen very small Series A rounds and enormous pre-seed rounds. The defining characteristic of each round isn’t as much about how much money is changing hands as it is about how much risk is in the company.

On your startup’s journey, there are two dynamics at play at once. By deeply understanding them — and the connection between them — you’ll be able to make a lot more sense of your fundraising journey and how to think about each part of your startup pathway as you evolve and develop.

In general, in broad lines, the funding rounds tend to go as follows:

  • The 4 Fs: Founders, Friends, Family, Fools: This is the first money going into the company, usually just enough to start proving out some of the core tech or business dynamics. Here, the company is trying to build…



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