Translation Results Requested Through Conyac Made Public

This phenomenon is nothing more to me than the sign of a growing and increasingly competitive market. With pre-seed funds, and follow-on funds, and Seed-A funds, startup funding has been chopped into lots of pieces. In the end, though, they present more funding options, which is great news for the entrepreneur. There is a certain stigma associated with seed extensions, but they’re quickly becoming the new normal, so I expect that will fade over time.

So given this dynamic in the early stage funding marketplace, and the fact that we have funded over 200 seed stage companies, here’s how I coach our companies beginning the “should we go for an extension or shoot for a series A” process:
Go see a few Series A funds — get a few datapoints, but not too many. It’s helpful to get a pulse check on the market. Try to identify warm targets — those investors who already know the company and may have expressed an interest in the past. After meetings and follow-ups with half a dozen or so, it will be clear if the Series A is looking to be a long slog or a straight shot. If the feedback is consistent, I often retrench with the companies and decide whether it’s worth the dozens of pitches required to close a round or whether going back to the seed community for a quick close makes more sense. In some cases, I’ve even seen the Series A/B guys become interested in participating in the extension (though that can bring signaling risk).