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cloud network hunting note: want to seed raise large sums of money is a difficult task; Want to get huge investments in A round of funding is difficult. So can get A lot of seed funding means that the company can obtain larger A round? The fact is not.
Nikhil Basu Trivedi ever recorded in A round of funding differences occurred in the market. Although there are A large number of entrepreneurial teams in A round of funding received more than $10 million, huge amounts of money, but A round of funding in the average amount of technology companies in the United States over the past six years, always around $5.3 million.
after seeing his post, I can’t help but wonder: A company get higher when seed financing, will be in A round of funding to get higher financing amount of an indicator? Any connection between the two? In other words, the seed of huge investment, whether can become the company’s total financing in the future when raising funds and trade valuation of chips?
let’s take a look at the data. Below is from 2005 to 2013, A total of 726 startups in the seed and A round of funding. X axis shows the seed amount, unit for thousand dollars; Y is A round of funding, total unit for millions of dollars. Each point represents a startup.
although the data, the distribution of these points are not exact rules to follow, but we can see three key points: first, in the seed funding successful companies, A round of funding to more than 10 million is very few, and money has nothing to do with the seed investment scale. Secondly, in the top right, we can see several seed and A round of financing funds are large companies, but very few, only four. Third, seed and A round of funding their funds there is not A barrier. Therefore I cannot come to “more seed money means that the larger A round of funding”.
but these are some useful information in the data. Two charts below, on the left is the size of the seed money, on the right is the size distribution of A round of funding. As you can see, the differences between the quite big.
can be seen from the diagram, the seed, the investment distribution is uniform; But by the end of A round of funding, the investment is closer to the distribution of power law. Financing is not A simple thing, but in A round of funding get massive fund is difficult. In the chart, 18% of the startups succeed in seed funding more than $1.5 million, but received the money in A round startup or even less than 8.5% of more than 10 million dollars.
in other words, A round of less than $10 million in the company than the company has up to 3 times higher than the $10 million of capital available. Compared with the seed number of investors to invest more than $1 million gold is less than 2 times of $1 million. Obviously, turning to early seed round of funding, is show a tendency of the development of the world at present.
all in all, seed capital size and seems to be A round of capital size not too big relations. But, at least in the market at present, founder wanted to raise enough seed financing is relatively easy.
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