Startup Funding Benchmarks
Deal terms, and the requirements to raise startup funding, are constantly in flux. The below metrics reflect what we are seeing across dozens of deals per month, and across most major geographic markets and industries.
Startup Funding Requirements & Milestones
The below are the average milestones and deal metrics we are observing across the globe on the date displayed.
Please note these figures are an approximate average, since deals vary widely across geographic markets, industries, and companies. In the end, a company is worth what an investor/ acquirer is willing to agree it is worth and the below should only be used as a baseline guide.
| Stage | Pre-Seed | Seed | Series A | |
|---|---|---|---|---|
| Traction | Customer Validation + Early Users | Product-Market Fit | Expansion |
Pre-Seed
Customer Validation + Early Users
Seed
Product-Market Fit
Series A
Expansion
|
| Growth Rate | 0 - 20% MoM | 15% - 30% MoM | 25%+ MoM |
Pre-Seed
0 - 20% MoM
Seed
15% - 30% MoM
Series A
25%+ MoM
|
| Monthly Revenue | $1 - $50k | $50k - $200k | $200k+ |
Pre-Seed
$1 - $50k
Seed
$50k - $200k
Series A
$200k+
|
| Team Size | 2+ | 10+ | 20+ |
Pre-Seed
2+
Seed
10+
Series A
20+
|
| Product | MVP (with users) | Robust | Commercial |
Pre-Seed
MVP (with users)
Seed
Robust
Series A
Commercial
|
| Investors | F&F, Seed Accelerators, Angels, Pre-Seed/ Micro VC Funds | Seed Accelerators, Angels, Seed VC Funds | Series A/ Growth VC Funds, Existing Investors |
Pre-Seed
F&F, Seed Accelerators, Angels, Pre-Seed/ Micro VC Funds
Seed
Seed Accelerators, Angels, Seed VC Funds
Series A
Series A/ Growth VC Funds, Existing Investors
|
| Round Size | $25k - $1m | $1m - $5m | $5m+ |
Pre-Seed
$25k - $1m
Seed
$1m - $5m
Series A
$5m+
|
| Company Valuation (Pre-Money) | $1m - $5m | $5m - $15m | $20m - $50m |
Pre-Seed
$1m - $5m
Seed
$5m - $15m
Series A
$20m - $50m
|
| Investment Vehicle | SAFE/ Convertible Note | Priced Round | Priced Round |
Pre-Seed
SAFE/ Convertible Note
Seed
Priced Round
Series A
Priced Round
|
| Equity Sold | N/A (convertible) | 20-25% | 15-20% |
Pre-Seed
N/A (convertible)
Seed
20-25%
Series A
15-20%
|
Startup "Traction" Metrics
In general, investors invest in "traction" over ideas. But the definition of "traction" changes across industries, and over time. The below are the average traction metrics/ milestones we are observing across the globe on the date displayed.
| Industry | Pre-Seed Traction | Seed Traction | Series A Traction | |
|---|---|---|---|---|
| Marketplaces/ eCommerce | $5k - $500k Transaction Revenue | $250k - $2m Revenue Run Rate | $5m - $20m Revenue Run Rate |
Pre-Seed Traction
$5k - $500k Transaction Revenue
Seed Traction
$250k - $2m Revenue Run Rate
Series A Traction
$5m - $20m Revenue Run Rate
|
| Consumer Audience | Demonstrable Customer Demand, 5k+ DAUs, Great Retention | 25k - 100k DAUs, Network Effects, Retention | 500k+ DAUs |
Pre-Seed Traction
Demonstrable Customer Demand, 5k+ DAUs, Great Retention
Seed Traction
25k - 100k DAUs, Network Effects, Retention
Series A Traction
500k+ DAUs
|
| Saas | Paid Pilots | $20k - $100k MRR | $200k MRR, 12 months of Cohort Data |
Pre-Seed Traction
Paid Pilots
Seed Traction
$20k - $100k MRR
Series A Traction
$200k MRR, 12 months of Cohort Data
|
| Deep Tech | Strong Leadership, PoC, GitHub Stars | Strong Leadership, PoC, IP, GitHub Stars | Commercial Validation |
Pre-Seed Traction
Strong Leadership, PoC, GitHub Stars
Seed Traction
Strong Leadership, PoC, IP, GitHub Stars
Series A Traction
Commercial Validation
|
Current State of Funding
In 2024 we expect a gradual stabilization of the startup funding landscape. Despite a decline from the highs of 2021/ 2022, the market is not in dire straits, especially for the earliest-stage startups. The current scenario is similar to the pre-bubble levels of 2019, which was a robust year for VC funding. However, the decrease in funding is more pronounced in later-stage startups (Series A and later rounds), a direct result of the inflated valuations seen in the bubble.
To successfully fundraise in 2024, entrepreneurs must showcase traction, and this includes pre-revenue startups. Utilizing technologies like AI to enhance efficiency is strongly encouraged. For startups with traction, a focus on growth and clear planning towards meeting future funding round metrics is crucial. Pitch decks need to emphasize a compelling narrative, and entrepreneurs should be prepared to pitch to a large number of investors for both feedback and potential leads (100+).
Despite these challenges, our overall outlook for 2024 is optimistic, and we expect funding at the earliest stages to continue its resilience. We also expect the IPO market to strengthen in 2H 2024, which would strengthen the market for later stage funding as we approach 2025.
Methodology
The Founder Institute is the world's largest pre-seed startup accelerator, with over 7,500 portfolio companies spanning 100 countries. Our data is derived from working closely with FI Alumni on their financing efforts on a daily basis, and observing dozens of term sheets and deals per month. In addition, this data leverages feedback from the FI Venture Network (a network of investors that participate in the earliest startup funding rounds) and our sister company, VC Lab (the leading accelerator to launch new venture funds).
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