posted at 18:51
Author: Kia Kokalitcheva
Wed, 03 Dec 2014 02:15:29 +0000
Post-seed investing is a strategy, not an investment stage, says Bullpen Capital partner
Speaking at the Post-Seed Conference, Davidson laid out for the audience the idea that investing after the initial seed investment but before the first traditional institutional round - aka at the post-seed stage - has emerged as a way to maximize on early stage investment. The goal is to get in early, help the company pop to a "Supersized Series A," and get a big return on the investment. As Bullpen views it, the post-seed funding happens when the company has raised about $2 million in funding. The extra post-seed round is for $5 million, and the company raising it is hoping to get to that "Supersized" Series A for at least $10 million. Now, the reason why these early stage investors, like Bullpen, go after this strategy is because there's only a small number of companies every year that will go on to be truly successful. Y Combinator founder Paul Graham estimates it is only about 15 companies. Post-seed investing is about catching these 15 startups before they've fully emerged and are raising their big first rounds. Or, as Davidson also put it, "The goal of post-seed isn't to get to an A round, it's to get to a super A round."

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