Valuation cap for fundraising by Peter Walker

Want to invest in startups at the earliest stages? If you wrote a check for $50k, here is the amount of equity you can expect to receive at each valuation cap based on latest SAFE data from Peter Walker at Carta in 2024: Angel, 8M Cap => 0.63% Big Angel, 10M Cap => 0.50% Pre-Seed, 12M Cap => 0.42% Seed, 20M Cap => 0.25% Jumbo Seed, 36M Cap => 0.14% Learn more about how SAFEs and caps work at the YCombinator link in the comments. As always, however, it's not about how much equity you own, but how much it is worth! 😉👍

All I gotta say is, "Dayumn!" To see such a pro-founder investment vehicle like the SAFE get such strong Angel valuation caps is 🤯 And definitely making me thinking we're undervaluing Autofluencer in our round and giving away too much? (We're $500k on a $2.5M value cap and convertible note... for now... we may flip to C Corp/SAFE sooner rather than later - structure is a long story, don't start in on it) Though, critical piece missing in this is what industries these companies are in. Since this is 2024 data, I'm going to guess close to 50% of these are trying to be some kind of AI something or other and we all already know those are inflated, but still getting the $$.

It’s tough for hardware startups to reach the same market value as software companies, even when starting with similar amounts of money. Hardware companies are more capital-intensive, as building physical products requires significant upfront costs for research, design, and production. These expenses constrain growth compared to software companies, which can expand much faster with the same initial funding.

"Peter, what should my valuation cap be?" Number one question I get from pre-seed and seed founders who've decided to fundraise on SAFEs. 𝗛𝗲𝗿𝗲'𝘀 𝘄𝗵𝗮𝘁 𝘁𝗵𝗲 𝗱𝗮𝘁𝗮 𝘀𝗮𝘆𝘀 Raising $250K-$499K | "Angel Round" • Median val cap is $8M • The segment of val caps from $5M-$7.5M is most common Raising $500K-$999K | "Big Angel Round" • Median val cap is $10M • The tier $10M-$14M is most common Raising $1M-$2.4M | "Pre-Seed Round" • Median val cap is $12M • The tier $10M-$14M is most common    Raising $2.5M-$4.9M | "Seed Round" • Median val cap is $20M • The tier $20M-$29M is most common Raising $5M + | "Jumbo Seed Round" • Median val cap is $36M • The tier $30M+ is most common Hope this info helps you close your early capital! Reminder that you can close SAFEs—and build your whole cap table—for free on Carta until you raise your first million. #startups #SAFEs #fundraising #founders  

Are you sure you understand valuation? #Valuation is key for funding! what should my valuation cap be?" Number one question I get from pre-seed and seed founders who've decided to fundraise on SAFEs. 𝗛𝗲𝗿𝗲'𝘀 𝘄𝗵𝗮𝘁 𝘁𝗵𝗲 𝗱𝗮𝘁𝗮 𝘀𝗮𝘆𝘀

Recently I reviewed one email to VCs. It stated something like: We are raising $X to make sure that we can enhance our mission and speed up growth to solve this problem. What's wrong with that? It's vague. Everyone wants to solve problems. Everyone wants to enhance their mission. Investors don't want to invest their $$$$ into vague statements like that. Your ask should have the following structure: We are raising $X to achieve 100K users in 6 months We are raising $X to reach $1M in ARR by the end of this year, by closing X amount of clients We are raising $X to expand to 30 cities by the end of this year and increase our presence from 1 location to 300 Be specific. Use numbers Avoid essays #startups #vcs #fundraising #coldoutreach

Most founders are drowning in fundraising advice. Here’s the only checklist you need to actually close your round. Swipe to learn how to assess for the following: ↳Checking if you're even ready for your startup fundraise ↳Defining & checking technical details ↳Getting your documents ready ↳Running your fundraising process ↳Negotiating the terms ↳Finishing the investment Thanks to BaseTemplates for this great checklist. Follow EverythingStartups for more. #startups #fundraising #venturecapital #founders #startupfounders #fundraisingchecklist #VC

Fundraising requires much more than a good pitch, a deck and an MVP! #Founders before deciding you want to raise fund please find out what your potential investors actually want. Fundraising is not 'one size fits all'.

Just catering to a Large TAM isn't enough to raise Funding. Just offering something unique isn't enough to raise Funds Just having a groundbreaking idea isn't enough to raise Funds Just having Premier Degrees isn't enough to raise Funds. You Need All of these PLUS A whole lot more to raise Funds. And the Best Funds for Your Business is Customer Revenue. #funding #growth #startups

Founders have to spend a lot of time on Fundraising. In fact, it's recommended that you need a separate co-founder just for fundraising to manage all the investors. If so much dedicated focus and attention was given to actually selling the product in the market, we would probably see more startups generating the funds that they wanted in the form of revenue, and less implosions. If any startup needs help with their GTM or Fundraising, feel free to apply at the link in my profile or DM me. #startups #growth #fundraising