In this live Q&A segment from SaaStr Europa 2022, the panelist (Speaker A) offers practical guidance on early-stage fundraising tactics. He advises that founders should engage their "dream" investor early—within the first few days of outreach—but not as the very first contact, placing them in the initial wave of conversations. Regarding transparency, existing investors should receive full updates, while prospective investors only need a rough indication of key metrics (e.g., ARR range) to assess fit. On currency considerations for cross‑Atlantic raises, the panelist notes that converting to dollars was once advantageous, but current exchange rates make using euros acceptable. Finally, he outlines typical dilution expectations: Series A rounds generally see about 20% dilution (15‑25% depending on round size and competitiveness), while Series B dilution tends to be lower, roughly 10‑20%, again influenced by raise size and market dynamics.
Chapters
First, I think your dream investor shouldn't be your first chat, but it should be among the first batch of chats you have, among the first wave. And as I try to have that in the first week, let's say, maybe on the first 2, 3 days of your week, it's not your number one pick, but on day 4 or something like that. And so keep it short in terms of amount of time, but keep them in the beginning as well. So I advise to keep them in the first wave. And your first question was optimizing for high conversion to fit later on in your process, right? Okay, then we go over there.
You said that you shouldn't necessarily dive old too many numbers before your fundraise, but how do you think about it when you, for example, do monthly updates? Like, how transparent should you be with an investor that's not your current investor?
I mean, with your existing investors, you should share everything, of course. With the new ones, I, I think it's good to have— to let them know which rough level you are. So I think it's good to know if you're at 1 million ARR or at 4 million ARR? Because this defines if it actually makes sense to spend time with this investor, or for him to spend time with you, or not. But I think it should be a rough indication.
Hi, sorry, late night. Could you give an idea in the Series A, Series B What's the average dilution we should be expecting to kick in? And, you know, I've seen wildly different, you know, how much you need to raise. $2 million at Series A, or is it $10 million? And, you know, and I saw your things. Do we all have to talk in dollars? Or so if you're doing a cross-Atlantic raise, do you convert everything to dollars for your British or European partners.
Okay, on the dollar question, last year it was worth it to convert to dollars because it sounded much bigger, but with the current exchange rate, it doesn't make a big difference, so you can keep it in euro. Then for, for the typical dilution, I think it's Series A stage, it's often somewhere around 20%, and it It depends on your competitiveness of your process. If it's a little bit less competitive, it's 20 to 20 or 20 to 25%. And also about the amount, if you want to raise a large round, the dilution might be above it, like 20 to 25%. If your round is not, you know, huge, it might be also somewhere between, you know, less than 20%, like 15 to 20%. But I think in the current market right now, around 20%, slightly above or slightly below, is something which makes sense. For Series B, it also depends on the total amount you want to raise and if it's sort of like in the standard range or not. But I think its dilution is typically slightly less. I would put it anywhere in the range 10 to 20%, depending on how much you want to raise and how the competitive situation of it actually is. Yeah. Thank you so much.
