Hello! Seed investing is basically the first few rounds of investing.
For tech companies in particular it goes something like this:
- Angel (less than 50k)
- Seed (between 50 to 500k)
- Series A (between 1m to 3m)
- Series B (between 3m to 10m)
- Series C (between 15 to 30m)
- Series D (between 40 to 80m)
- It goes on and on until IPO
Later stage companies are usually backed by full fledged private equity (PE) firms which are usually pre-IPO and they basically push the company further along towards an exit opportunity which happens within a 3 to 5 year timeframe.
*One exciting PE firm which we've come to know and love (hint: Astrea bonds) is our TEMASEK government linked investment firm.
To share abit more context, yes you usually get more equity at a lower valuation round, but the problem with this is also about the traditional risk/reward concept.
However, the chance of failure in early stage companies (pre-seed) is 99 out of 100 companies, especially in tech, and also F&B (I think even higher)
Some of the more prominent Seed investors around the world and in this region are like Y Combinator, East Ventures, Quest Ventures and 500 Startups who have backed really huge companies today but were 2 to 3 man outfits back then. However what you don't see is a huge proportion of them who also have failed along the way. As shared 99 out of 100 fail, but you only need 1 to return a 1000x of your initial investment to get your outsized returns. Thus often, these seed stage companies have a thesis in either:
- Founder
- Potential Market
- Product
And with that, a founder-market fit, which is often a common thesis among early seed stage investors which gives them an edge to 'win over' the market.
And alternative to this would be to actually join the startup as a core team member or consultant in exchange for this idea called 'sweat equity' where you actually exchange your time and effort to build the startup together with the founders or team. All the best if you are planning to raise some capital in the private markets! Happy to answer more questions in the space of startup financing or private markets! :)
Hello! Seed investing is basically the first few rounds of investing.
For tech companies in particular it goes something like this:
Later stage companies are usually backed by full fledged private equity (PE) firms which are usually pre-IPO and they basically push the company further along towards an exit opportunity which happens within a 3 to 5 year timeframe.
*One exciting PE firm which we've come to know and love (hint: Astrea bonds) is our TEMASEK government linked investment firm.
To share abit more context, yes you usually get more equity at a lower valuation round, but the problem with this is also about the traditional risk/reward concept.
However, the chance of failure in early stage companies (pre-seed) is 99 out of 100 companies, especially in tech, and also F&B (I think even higher)
Some of the more prominent Seed investors around the world and in this region are like Y Combinator, East Ventures, Quest Ventures and 500 Startups who have backed really huge companies today but were 2 to 3 man outfits back then. However what you don't see is a huge proportion of them who also have failed along the way. As shared 99 out of 100 fail, but you only need 1 to return a 1000x of your initial investment to get your outsized returns. Thus often, these seed stage companies have a thesis in either:
And with that, a founder-market fit, which is often a common thesis among early seed stage investors which gives them an edge to 'win over' the market.
And alternative to this would be to actually join the startup as a core team member or consultant in exchange for this idea called 'sweat equity' where you actually exchange your time and effort to build the startup together with the founders or team. All the best if you are planning to raise some capital in the private markets! Happy to answer more questions in the space of startup financing or private markets! :)