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6 strategic stages of seed fundraising in 2020

With so many new investors, the old seed fundraise playbook needs a rewrite

Seed fundraising is rarely easy, but it certainly used to be a lot less complicated than it is today. In a simpler world, a seed investor (or maybe two) would lead a round, which meant that they would write the terms of the deal in a term sheet and then pass that document to their friends to flesh out the funds and eventually close the round. That universe of investors was small and (unfortunately) often cliquish, but everyone sort of knew each other and founders always knew at least who to start with in these early fundraises.

That world is long since gone, particularly at the seed stage. Now there are thousands of people who write checks into the earliest startup venture rounds, making it increasingly challenging for founders to find the right investors. “Pre-seed,” “seed,” “post-seed,” “seed extension,” “pre-Series A” and more terms get batted about, none of which are all that specific about what kinds of startups these investors actually invest in.

Worse, obvious metrics in the past that helped stack-rank investors — like size of potential check — have come to matter far less. In their place are more nuanced metrics like the ability to accelerate a deal to its closing. Today, your greatest lead investor may be the one who ends up writing the smallest check.

Given how much the landscape has changed, I wanted to do two things for founders thinking through a seed fundraise. First, I want to talk about how to strategize around a seed fundraise today, given the radical changes in the market over the past few years. Second, I want to talk about a couple of the archetypes of startup stages you see in the market today and discuss how to handle each of them.

This article focuses on “conventional” seed fundraising and doesn’t get into a bunch of alternative models of VC that I intend to explore in the coming weeks. If you thought traditional seed investing is complicated, wait until you see what the alternatives look like. The upshot, though, is that founders with the right strategy have more choices than ever, and, ultimately, that means there are more efficient ways to use capital to get the desired outcome for your startup.

Thinking through a seed fundraise strategy

Let’s get some preliminaries out of the way. This discussion assumes that you are a startup, looking to fundraise a seed round of some kind (i.e. you’re not looking to bootstrap your company) and that you are looking to close some sort of conventional venture capital round (i.e. not debt, but equity).

The problem with most seed fundraising advice is that it isn’t tailored to the specific stage of the startup under discussion. As I see it, there are now roughly six stages for startups before they reach scale. Those stages are:

Seed fundraising is rarely easy, but it certainly used to be a lot less complicated than it is today. In a simpler world, a seed investor (or maybe two) would lead a round, which meant that they would write the terms of the deal in a term sheet and then pass that document to their […]

The Stages of the Flower Life Cycle

The plant life cycle starts when a seed falls on the ground. There are many different kinds of plant life, but the flowering plants, or angiosperms, are the most advanced and widespread due to their amazing ability to attract pollinators and spread seeds. Flowers are more than beautiful objects to look at or decorate with; they serve a very important purpose in the reproduction of plants. The major stages of the flower life cycle are the seed, germination, growth, reproduction, pollination, and seed spreading stages.

Seed Stage

The plant life cycle starts with a seed; every seed holds a miniature plant called the embryo. There are two types of flowering plant seeds: dicots and monocots. An example of a dicot is a bean seed. It has two parts called cotyledons in addition to the embryo. The cotyledons store food for the plant. Cotyledons are also the first leaves that a plant has-they emerge from the ground during germination. Monocots have only one cotyledon-the corn seed is an example. Both kinds of seeds have the beginnings of a root system as well. The hard outside of the seed is called the seed coat and it protects the embryo. Some seeds are capable of growing even after many years if they are kept cool and dry.

Germination

When a seed falls on the ground, it needs warmth and water in order to germinate; some seeds also need light. Dicots have seed coats that soften with moisture. After being planted in the soil for a few days, the seed absorbs water and swells until the seed coat splits. Monocots have harder seed coats that do not split, but stay in one piece. The stem, called the hypocotyl, pushes through the soil along with the cotyledons, or seed leaves; this is called germination, or sprouting. The tiny root pushes down and grows, looking for water and nutrients. Soon the cotyledons fall off and the first true leaves emerge. It is important that the seed is planted in the right place at the right time in order for it to germinate. Some seeds need to go through a fire in order to sprout, such as prairie grasses. Some need to go through the stomachs of animals, or be scraped. Different seeds have different needs!

Growth

In order to complete the flower life cycle stage of growth, plants have to produce their own food. This process is called photosynthesis. As soon as the leaves emerge, they start the process of photosynthesis. Plants contain chloroplasts in the leaves which convert the energy from sunlight, carbon dioxide, and water into sugars, which they use as food. The plants store the sugars in the roots and stem. The root system continues to develop, anchoring the plant into the ground and growing root hairs which help the plant to better absorb water and nutrients. The stem grows longer towards the sun and transports water and food between the roots and leaves. Sugars and starches are changed into energy used to make new plant growth. New leaves grow from the top of the stem, or meristem. After a while, flower buds develop. Some plants flower within days while it takes others months or even years.

Reproduction

Inside the bud, a tiny but complete flower forms. The sepals protect the bud before it opens. Over time, the bud opens and blossoms into a mature flower and the sepals look like little green leaves at the base of the flower. The flower is the sexually reproductive part of the plant. The petals of the flower are often very noticeable, brightly colored, and strongly scented in order to attract pollinators. This is a very exciting stage of the plant life cycle!

The female part of the flower is called the pistil and it has four parts– the stigma, style, ovary, and ovules. The male part of the flower is called the stamen and it consists of the long filament and the anther, where pollen is made. In the center of the flower, there is a long slender tube that ends in a rounded oval. The tube is called the style. On the top of the style is the stigma-its job is to catch pollen. It may be sticky, hairy, or shaped in a way that helps it to better trap pollen. Sometimes several stamens surround the pistil. Once the pollen is trapped it travels down the style to the rounded part at the end, called the ovary, where eggs are waiting to be fertilized. The fertilized eggs become seeds in this stage of the flower life cycle. In fruit producing plants, the ovary ripens and becomes fruit.

Pollination

Some flowers have only male parts, and some have only female parts. In others, the male and female structures are far apart. These plants depend on insects, birds, animals, wind, water, or other pollinators to carry pollen from the male flowers or male parts to the female flowers or female parts. Without pollinators, there would be no seeds or new plants in these plant species. . Even flowers that can self-pollinate benefit from being fertilized by pollen from a different plant, which is called cross pollination, because cross pollination results in stronger plants.

Brightly colored petals, strong smell, nectar, and pollen attract pollinators. Flowers are specially adapted to attract their specific pollinators. For example, the corpse flower smells like rotting flesh in order to attract flies. Pollen sticks to the legs and wings of insects that go from flower to flower for nectar and pollen, which they use as a food. Pollen sticks to the fur of animals and even to the clothes of humans. Wind blows pollen which lands on other flowers.

Spreading Seeds

Seed spreading, or dispersal, is the final stage of the flower life cycle. Seeds are spread in many ways. Some, like dandelion seeds, are scattered by the wind. Others rely on animals-an example of this is the cockleburs that get stuck in the fur of animals and hitchhike to new locations. Water lilies depend on water to spread their seeds. Humans spread many seeds intentionally by planting gardens. Once the seeds fall to the ground, the plant life cycle starts all over again.

For more information on the flower life cycle, please visit these links:

Learn about all of the different stages in the growth cycle of a flower, from seed to bloom and beyond.