This document discusses the different sources of investment for startups at various stages - seed/pre-round, angel investors, and venture capital. It outlines the typical expectations and characteristics of investors at each stage, including the expected state of the startup, typical investment sizes and valuations, and background of the investors themselves. Seed/pre-round startups are expected to have an initial idea and plan but lack full development, customers, or revenues. Angel investors may provide $100K-$1M and are experienced individuals not doing investing full-time. Venture capital firms raise other people's money and provide larger $500K-$1.5M investments for later stage startups seeking $5-10M valuations.

1. Sources of Investment: Seed, Angels and VC’s
Stage (Pre-Round):
• Expected to
have:
• An idea, initial/rough
b-plan
• Initial founders, key
advisors
• Path to ???
• Detailed b-plan,
• Key founders (bus & tech) full-time
• Prototype/alpha done and tested,
• Some piloting (paying?)
customers, some revenues?,
• All legal documentation in place,
board of directors
• Path to break-even or next funding
• Significant variation among firms
but…. Angel req. +:
- Anchor clients on board, revenue
growth (B2B),
- Growing base of users, with strong
usage trends (B2C)
- …..Growth potential! Credible
path to $100M Rev
• Don’t Expect: • $ Rev, Customers,
Minimum Viable
Product (MVP); full
legal documentation
• Income (e.g. cash flow positive);
all key management ; completely
developed business model (e.g.
understand it will change)
• Income (e.g. cash flow positive)
Who/what are
they?
• People you already
know, that trust
you, and (maybe)
understand your
venture
• Experienced early stage
investors (individuals or a group)
• Accredited Investors.
• Angel investing is not their “job”;
may not be F/T endeavor
• E.g.: NY Angels, GoldenSeeds
• Firm with multiple professionals that
raises, invests and manages
individual funds (other people’s $)
• Working F/T (this is their job…)
Angel Investment
Friends and
Family
Venture Capital
“You”
aka Bootstrapped
Earlier Stage Later Stage
Round Size $: • $10’s of K
to $100K
• $100’s of K
to $1M+
• $500K to
$1.5M
Investment Size $: $5K – $10’s of K • $25K – $75K • $250K-$750K
Valuation (Pre-
Mon):
• < $1 M • $1 – 5 M • $5-10 M
“Seed” VC “Traditional Series A” VC
• $5M-$15M
• $3M – $5M
• $10 – 25 M
“Seed”