Most startups never get past the pitch deck stage, so getting an investor to say yes can become a founder’s all-encompassing desire. Getting into an accelerator like Y Combinator can open countless doors, but this year, some investors are saying that the higher valuations these startups obtain today will make fundraising more difficult later. In a TC+ article that examines four different seed investor models, Work-Bench general partner Jonathan Lehr examines “the underlying incentives and biases of different investor archetypes, ranging from YC to seed firms to multistage firms.” The Notorious B.I.G. wasn’t referring to high-valuation startups when he wrote, “It’s like the more money we come across, the more problems we see,” but it’s relevant here. “Most Series A investors would look to at least 2x the valuation of the seed raise,” says Lehr. “Consider the milestones that would be sought out in a scenario to justify a $20 million valuation doubling to $40 million, compared to a $12 million doubling to $24 million.” Food for thought, Walter Thompson Editorial Manager, TechCrunch+ Read More |