Jeff BussgangGeneral Partner, Flybridge and Senior Lecturer, HBS. Former entrepreneur. AI nerd.

5 - Milestones by funding stage (by Jeff Bussgang)

Name: 5 - Milestones by funding stage (by Jeff Bussgang)
Uploaded: 2020-12-01T01:22:44+00:00
Duration: 1 min 6 s
Channel: Jeff Bussgang
Description: Jeff Bussgang outlines four typical startup fundraising stages—Pre-seed, Seed, Series A, and Series B—giving concrete heuristics for each stage including…

1 Dec 2020 · 1 min

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1:06

Jeff Bussgang outlines four typical startup fundraising stages—Pre-seed, Seed, Series A, and Series B—giving concrete heuristics for each stage including typical funding amounts, valuation benchmarks, and product/customer milestones (e.g., prototype → early users/customers → ARR and repeatable sales). The guidance is practical and aimed at founders preparing to raise capital.

Questions this video answers

A few hundred thousand dollars (from friends and family, often with just a prototype and solo founder).

Raise a few million dollars typically at a $10 million post-money valuation; often led by seed-focused VC firms.

Raise $5–10 million; often after reaching product–market fit, e.g., roughly $1M ARR or ~100,000+ engaged users.

Raise tens of millions of dollars; post-money valuation often in the hundreds of millions; company has repeatable sales and marketing to scale further.

Chapters

There are four typical stages to the fundraising process as you build your company. First you have the pre seed stage where you raise a few hundred thousand dollars, typically from friends and family, even with just a prototype and a solo founder. Then you have the seed round where maybe you have an early beta, a handful of customers who are referenceable in the case of a B2C company, maybe 10,000 users who are engaged, and you want to raise a few million dollars typically at a 10 million post and that round is typically led by a venture capital firm that specializes in seed deals. And then you have the Series A where you're really scaling your post product market fit maybe at a million of ARR, maybe 100,000 users or more quite engaged and you want to raise 5 to 10 million dollars led by a typical series A firm. And then finally you have the Series B, tens of millions of dollars perhaps valued at hundreds of millions of dollars in post money valuation. You're well beyond product market fit into repeatable sales and marketing and you're raising a lot of capital to really scale the model to the next level.