With YC W23 demo day came the ever-continuing dialogue on how early-stage financings should be priced lives on. You’re bound to hear self-serving arguments from all sides of the table. Smaller seed funds will tell you that prices are outrageously high and not setting up companies for future success. Larger multi-stage funds will be more price-agnostic as they look to continue to deploy capital by any means necessary so they can raise their next fund and boost their management fees. Management at YC will tell you that seed prices are meaningless if you believe you are backing the next Stripe or Airbnb or Doordash. There’s some truth in all of these arguments though, but one thing that’s been completely missing in the dialogue though is how a founder should actually construct a seed round. And with that, the best piece of advice I can give to all current and future YC founders is this:
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The Makings of a Seed Round
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With YC W23 demo day came the ever-continuing dialogue on how early-stage financings should be priced lives on. You’re bound to hear self-serving arguments from all sides of the table. Smaller seed funds will tell you that prices are outrageously high and not setting up companies for future success. Larger multi-stage funds will be more price-agnostic as they look to continue to deploy capital by any means necessary so they can raise their next fund and boost their management fees. Management at YC will tell you that seed prices are meaningless if you believe you are backing the next Stripe or Airbnb or Doordash. There’s some truth in all of these arguments though, but one thing that’s been completely missing in the dialogue though is how a founder should actually construct a seed round. And with that, the best piece of advice I can give to all current and future YC founders is this: