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Raising money? There's a new entry fund-raising step -- 'pre-seeding'
After family and friends, hopeful entrepreneurs would go to seed funds to raise money. There's a new step now in the fundraising process. It's called "pre-seed." Sarah Lacy writes in Pando.com (paywall):
Welcome to the messy, inevitable collision of four trends: The series A crunch, bigger rounds later in a company’s life demanding higher pro-ratas, the rise and success of institutional seed rounds over the last 5+ years, and the increasing prices of building a company in San Francisco.
Simply put: “Seed” is no longer seed. Pre-seed is seed. And even that’s not the earliest round: There’s friends and family before that. “Series A is actually the fourth round of funding,” says Manu Kumar, of K9 ventures, the best known pre-seed fund. “Before that there is seed, then before that there is pre-seed and then before that there is friends and family. We are the first institution in, but typically we are the second money.”
Photo: Hartwig HKD