During the past ten years, the startup journey from 0 to 1 hasn’t changed much, though the definitions of the rounds have. We present some “average” definitions and assumptions relevant for B2B companies. These may vary depending on the market, startup type, founders with previous exits, and other things.
One more thing before we start. We are not the ultimate authority here, please feel free to share your experience in the comments! Now, let’s discuss the main stages of the process. Pre-Seed
Commonly known as an idea stage, with the ticket size starting from 100k (FFF + Accelerators) to 700k (Angels, Pre-seed VCs). At this stage, you should have:
✅Team. Well-balanced and complimentary group of people with a proven capacity to execute fast. A track record in the target industry is a big plus.
✅Traction. An MVP – be it a mockup, video, or beta prototype – that illustrates the concept and helps validate it with your customers.
✅Market. A Hi-Po environment with a room to build something big?Seed
Set sights on the ticket size of 1 to 5 mln (Angels, Pre-seed VCs, Seed VCs, Series A VCs). To consider yourself ready for the seed you should have:
✅Traction. A basic version of a working product and early signs of customer adoption – LOIs, MOUs, PoCs, Pilots, etc.
✅Revenue. $1-200k ARR.
✅Team. The staff that covers product, sales, coding, and other core functional roles. Such a team is ready to earn money as it is.
✅Market. A competitive environment where the level of competition is manageable, but not critically low. If there are no direct or indirect competitors, there may be no need for what you are building.
Thanks to Ian Taylor
, we know that Pear VC
has a cool metric that helps define if you are at the seed stage:
“You do not change your deck/app / MVP each time to acquire a new customer.”
Draivn advice to reach seed from pre-seed in a time- and resource-effective manner:
Iterate fast. Validate your hypothesis with customers and leave the working ones.
Build fast. Focus on the core functionality, have a bigger product picture, but don’t overload your backlog.
Ignore market noise, including the rounds raised, press releases, and #wearehiring.
Sell-sell-sell. If you are in the enterprise market, focus on first founder-driven deals.Series A
Although Draivn is not yet here, we use some smart people's ideas to define the nature of the Series A round.
First, set for the check size of $8-20 mln (Seed VC, Series A/ B VC, Corporate Funds) and the following deliverables:
✅ Market. Your project may be a one-billion company, and you can make it happen.
✅ Traction. Positive, scalable unit economics and efficient growth of >100% YoY).
✅ Revenue. More than $2 mln ARR and a plan to increase it fivefold in two years.
✅ Team. A scalable hiring plan for the growing company.
The core advice here is to focus on efficient growth vs. just growth. Avoid the situation when your sales and marketing costs are higher than the revenue. Use data to measure this performance. And please, do not manipulate it.