FOR STARTUPS
Your go-to hub on all-things-fundraising for early-stage startups. Insights from fundraising experts: guides, best practices, and real-world advice from founders and investors who’ve been there.
TABLE OF CONTENTS
Introduction to fundraising
Sources of fundraising
Stages of fundraising
Investment types
Types of rounds
Investment instruments
Preparing for fundraising
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Funding is critical for startups, especially in competitive markets where investment capital can accelerate growth. Without it, turning an idea into a viable business, covering expenses, hiring talent, and scaling fast can be challenging.
Fundraising, however, is complex and time-consuming. The right strategy depends on your company’s stage, needs, and goals. This guide cuts through the noise to help you navigate funding options, from choosing the right sources to building relationships with investors who can offer more than just money—they can provide mentorship, expertise, and connections to drive your growth.
Startups often begin by bootstrapping, which allows founders to maintain full control over their company. While bootstrapping gives founders complete autonomy, the downside is slower expansion and potentially missed opportunities that outside funding might enable.
As they grow, a range of external fundraising options becomes available, each suited to different stages and needs. The most common sources of startup fundraising include: angel investors, Venture capital (VC), crowdfunding, friends and family, debt financing.
These need to be corroborated with a startup's growth stages, which we also analyze later.
Angel investors are individuals who use their personal resources and wealth to fund startups, often at early stages. These investors tend to be successful entrepreneurs or high-net-worth individuals (HNW) looking to back emerging companies before they attract venture capital.
Angel investors are typically the first “official” investors a company encounters when seeking a serious fundraising round. Typically, rounds raised from angels range from €10,000 to €100,000 per investor, but through syndication, they can collectively raise up to €500,000 or more.
➕ Angel investors provide faster, flexible funding with valuable industry and operational expertise, networks and personal involvement, often bridging the gap to larger VC rounds. This source of funding is crucial for early-stage growth.
➖ On the other hand, they can bring less structured support, potential for over-involvement, and non-standard terms, which may complicate things down the road.
Venture capital firms are professional investment organizations that pool large amounts of money from various sources, like institutional investors and high-net-worth individuals, to invest in high-growth startups.
Unlike angel investors, VCs typically focus on the later stages of a company’s growth, offering larger amounts of funding, usually from €1M to tens of millions per round. The initial seed rounds provide early capital to develop the product and gain initial market traction, while later rounds like Series A, B, and beyond are used to scale the business, enter new markets, or develop new products.
VCs often specialize in specific industries, such as tech or healthcare, and provide more structured support, including operational resources, strategic guidance, and recruitment help. However, securing VC funding is longer and more complex, often taking several months of due diligence and negotiation.
To discover European venture capital firms, check out SeedBlink’s 1,800+ European VC Network here.
➕ Venture capital firms invest in high-growth startups, providing large-scale funding typically in later stages. VCs often offer strategic guidance, industry expertise, and network access, supporting startups through multiple funding rounds and helping with operations.
➖ But they might take board seats, enforce high growth expectations, and put pressure on performance metrics, which can lead to team fatigue and exit pressure.
How to avoid becoming uninvestable to a VC:
Crowdfunding is a method where startups raise capital by offering shares in their company to a large number of individual investors through online platforms. Unlike venture capital, where funding comes from a few institutional investors or high-net-worth individuals, equity crowdfunding allows anyone to invest, often with small amounts of money.
Investors in equity crowdfunding receive shares in the company in exchange for their investment, just like VCs or angel investors, but without the need for significant due diligence or negotiations. This process is generally quicker and more accessible for startups, allowing them to tap into a wide audience of potential backers.
While this is a more fast and flexible way to raise capital, it comes with challenges such as the extra effort required to promote the round to your community or managing many small investors (the recommendation here is to syndicate them, instead of having hundreds or thousands of investors in your cap table). Equity crowdfunding is often used by early-stage startups to raise smaller amounts of capital, typically between $50,000 and $2 million.
Platforms like SeedBlink offer vetted tech investment opportunities for strategic portfolio growth, as well as access to a secondary market, that provides early liquidity.
See how .lumen raises €1M in one day on SeedBlink, check out the case study.
Key elements to consider when choosing to go with a crowdfunding round:
Debt financing is a method of raising capital where a company borrows money and agrees to repay it over time with interest. Instead of giving up equity or ownership, the company takes on debt through loans, bonds, or credit lines from banks, financial institutions, or private lenders. Borrowed funds support operations, growth, or specific projects, and the company retains full control of the business.
The main advantage of debt financing is that founders maintain ownership and don't have to dilute equity or give up decision-making power. However, the downside is the obligation to repay the loan with interest, which can add pressure on cash flow, especially for early-stage startups that aren't yet profitable. Failure to meet repayment obligations can lead to financial distress or even bankruptcy.
Grants are a viable fundraising option for startups, particularly for those involved in medical research, innovation, or socially impactful projects. Unlike other forms of funding, grants do not require repayment, and companies do not have to give up equity or ownership. Grants are typically awarded by governments, non-profits, or foundations to support specific types of businesses or initiatives.
The European Union and individual countries offer various grant programs to support entrepreneurs and stimulate economic growth. Some of the most prominent grant programs in Europe include:
The challenge is the competition and time-consuming application process, but the potential benefit of receiving non-dilutive capital makes it worthwhile for many startups. In addition to cash prizes, startups get valuable resources such as mentorship, networking opportunities, and in-kind services. The prize money in startup competitions can range from €5,000 for smaller, local events, to €100,000 or more for high-profile international competitions.
Accelerators are programs designed to support early-stage startups by providing them with resources, mentorship, and funding to help them grow quickly over a short period, typically lasting a few months. These programs usually focus on fast-tracking the development of a startup’s business model, and market strategy to prepare the company for its next fundraising round or market entry.
Accelerators typically provide:
Startups typically "graduate" from an accelerator after a demo day, where they present their progress and pitch to investors for further funding.
There are several stages of startup fundraising, though the specific terminology and steps can vary slightly depending on the industry or country. These stages help startups secure the necessary capital to grow at different phases of development:
The number of funding rounds a startup can take depends on the type of financing, the amount raised in each round, and the company's needs. Some startups may only need one round of financing, while others may require several rounds over time – it all depends on the company’s development and growth.
Here's a quick summary of how much startups typically raise in each round. Since this guide focuses mostly on early-stage companies, we have condensed the last category to B+. Series C, D, E, etc. are growth-stage funding rounds that occur as companies scale considerably and prepare for potential exits, such as an IPO or acquisition.
Fundraising conditions can vary widely depending on the type of company and several external factors.
For example, SaaS startups often follow a more predictable path for raising funds because investors typically look for recurring revenue and customer retention metrics. An example of how these conditions shift can be seen in PointNine Capital’s Fundraising Napkin for SaaS Startups, which gives benchmarks for what SaaS companies should aim for at different stages of growth.
Inspired by PointNine Capital, First Momentum Ventures proposes a similar fundraising framework for DeepTech startups.
In addition to these major funding rounds, companies also pursue bridge rounds. Bridge rounds are short-term funding solutions that help startups maintain momentum between larger funding rounds. Typically, they provide companies with capital to extend their runway or meet certain milestones before raising a larger round (such as Series A or B).
These rounds are often accompanied by convertible notes or SAFEs, which allow investors to convert their investment into equity in the next priced round. While bridge rounds can prevent disruptions in growth, they can also dilute equity and signal potential challenges in securing larger funding. It's important to carefully consider the timing and terms when considering a bridge round.
Here’s a high level overview of round stages, with particularities on invested amounts, equity offered and so on.
Now, let’s dive into the stages!
Your fundraising journey usually begins with pre-seed funding.
It’s one of the earliest rounds where founders use their own money or funds from friends, family, or early supporters to develop the initial product or concept. The amounts raised here are typically small and used to create a minimum viable product (MVP).
Pay attention to diluting yourself too early. While you may need to offer some equity in exchange for early funding, be cautious about how much you give. On average In this stage, you can look at convertible notes or SAFEs, as they allow you to postpone setting a concrete valuation for your startup and are generally simpler and faster to negotiate than traditional equity rounds.
Always use an equity dilution calculator to understand how the current ownership stake in your company may be diluted over time due to factors such as new investments.
As a founder seeking pre-seed funding, you should be prepared with the following things before presenting yourself in front of potential investors:
Check out SeedBlink’s Funding Sprint program designed to support pre-seed startups in building robust business foundations and securing the necessary funding to accelerate their growth.
A seed round is often considered the first "official" equity funding stage and is crucial for getting your business off the ground. Seed funding supports initial market research, product development, and early marketing efforts. It helps startups move beyond the concept or MVP stage and build a viable business.
Common sources for seed funding include:
Some startups also turn to equity crowdfunding platforms at this stage. The goal is often to raise enough capital to reach important early milestones and position the company for a larger Series A round.
As a founder seeking seed funding, you should be prepared with the following things before presenting yourself in front of potential investors:
A Series A round follows a successful seed round and is generally used to optimize the product, expand the team, and accelerate growth in key markets.
Investors at this stage are usually established venture capital firms but may include angel investors or corporate venture arms. The due diligence process is often more rigorous than in earlier rounds, with investors closely examining the company's business model, market opportunity, and management team.
As a founder seeking seed funding, you should be prepared with the following things before presenting yourself in front of potential investors:
A Series B round marks a startup's transition from early-stage to growth-stage, typically following a successful Series A.
This stage of funding is for companies that have strong market traction, have established a solid revenue model, and are ready to scale significantly. Series B capital is typically used to rapidly scale the business, often involving expansion into new markets, development of new products or services, and significant team growth.
The investment amount can vary based on factors such as industry, growth rate, and market potential. Investors at this stage are predominantly larger venture capital firms, including Series A participants and new growth-stage specialists. The due diligence process becomes more rigorous, scrutinizing financials, growth metrics, market position, and scalability potential.
Importantly, you're no longer considered an early-stage startup at this stage. Investors now view you as a growth-stage company, with expectations changing accordingly. Future investor expectations include:
There are situations where founders need to raise in-between or bridge rounds to keep their business running while working towards their next major funding milestone. These rounds act as a financial lifeline, helping companies stay afloat when they’ve hit a cash crunch but aren’t quite ready for a full-blown Series A, B, or C raise.
For example, a startup might need more time to hit key metrics or finish a product, and raising a bridge round allows them to do that without losing momentum or compromising their vision. If investors are cautious due to economic uncertainty, founders may find it tougher to secure a large investment. In these situations, a bridge round can offer the flexibility needed to extend the runway, giving the company time to achieve specific goals or wait for a more favorable market before launching a larger round.
When discussing types of investments available to startups, it’s important to distinguish direct or syndicated investments.
This is a straightforward investment where an investor or several investors directly provide a capital injection in the startup. Direct investments offer clarity and simplicity, and the implications are that each investor is featured in the cap table.
This form of investment typically gives investors more control over the decision-making process, as they often have a more hands-on role in the business. Direct investments are typically equity investments but can also happen via convertible notes or SAFEs.
Syndication allows multiple investors to pool their resources into a single investment vehicle. Syndicated investments can be driven by the startup or by a lead investor. In the latter case, the lead investor is responsible for negotiating, coordinating and conducting due diligence on the investment.
Syndicated investing is particularly useful for startups because it simplifies the cap table, reduces the administrative burden, and allows smaller investors to participate without complicating governance. It also allows startups to raise more capital from multiple sources while keeping the equity structure streamlined.
At the same time, syndication is also attractive to angel investors because it allows them to diversify their portfolio and/or participate in promising deals that require a larger ticket than they would otherwise have access to. Syndication is also used for crowdfunding rounds, with the main benefits of keeping the cap table clean and simplifying post-investment governance.
In Europe, syndication of investments is most commonly structured through nominee structures or Special Purpose Vehicles (SPVs). Each structure has its own legal, tax, and administrative considerations, which vary across European jurisdictions. Their mechanism serves to pool multiple investors into a single entity, simplifying the cap table for startups – the vehicle is listed as a single shareholder in the cap table - and making it easier to manage investments. This type of investment is usually aimed at seed startups with a round range between €100,000 and €1,000,000.
Check out our product documentation to learn more about the nominee structure and benefits.
See how business angels – members of TechAngels - were able to be part of a financing round, angels who otherwise might not have been able to place a substantial ticket enough to directly enter the cap table. Read the case study.
When discussing investment vehicles, it's important to understand the structure of how funds will be pooled and the type of investment round - whether it's a priced round or an unpriced round.
Each approach has unique implications for both the startup and the investors involved, particularly about how the company is valued and how ownership is structured. Analyze these factors carefully when determining the best fundraising strategy, as they can have long-term effects on the company's equity, control, and relationship with investors.
An unpriced round does not have a set valuation. Instead, investors lend money that converts into equity at a later priced round. Convertible notes and SAFEs (Simple Agreements for Future Equity) are commonly used in unpriced rounds. These investment instruments are explained below.
In a priced round, the company has a set valuation and share price, allowing investors to receive equity in exchange for their investment. It’s often called an equity round and typically occurs after the company has achieved key milestones.
During a priced round, founders and investors negotiate key terms like valuation, drag-along rights, tag-along rights, liquidation preferences, and reserve matters, which determine shareholder rights and control over company decisions.
Both types of rounds come with opportunities and risks. Priced rounds provide clarity but may involve giving up more control, while unpriced rounds offer flexibility at the cost of potential complications like dilution or unfavorable terms.
Startups have several investment instruments at their disposal, each offering different terms and structures for raising capital. The most common include equity, Convertible Loan Agreements (CLAs), and Simple Agreements for Future Equity (SAFEs).
Each of these investment types caters to different needs and stages of growth, offering varying levels of risk and control for both founders and investors. Understanding which structure works best for your company can help optimize your fundraising strategy.
Let’s dive into each one of them.
Equity investments involve selling ownership stakes in your company and are used at all startup stages. These investments involve immediate ownership dilution, as investors receive shares in the company in exchange for their capital. A company valuation is required for equity deals, and investors often gain voting rights and, potentially, board seats. Equity investments do not have a maturity date, making them a long-term commitment, but they are relatively complex and offer low flexibility compared to other investment instruments.
Another type of financing is via debt instruments such as Convertible Loan Agreements (CLAs) also called Convertible Notes. These are short-term debt instruments that convert into equity at a later stage, typically when the startup raises its next funding round. Convertible notes are appealing because they postpone the need to establish a valuation, making them a popular option for early-stage startups looking to raise money quickly without the complexity of pricing a round.
CLAs bear interest rates and are a more complex instrument, with terms such as valuation caps, discounts, and maturity dates defining how and when the loan converts into shares as well as explicit mechanisms in case a priced round does not occur by the maturity date.
Understand the impact of convertibles on ownership structure and the role of bridge rounds in startup financing:
Similar to convertible notes, SAFEs allow startups to raise funds without immediate equity dilution. SAFEs convert into equity in future financing rounds, offering flexibility for both investors and startups. However, unlike convertible notes, they don’t accrue interest, making them more founder-friendly.
A standard SAFE is a simpler instrument, in that it does not contain a maturity date nor any mechanism for conversion outside a priced round (at floor valuation). In the US, SAFEs are considered an equity instrument, while in other jurisdictions, including the EU, it is considered a debt instrument.
Founders need to understand how SAFE conversions will impact their ownership and control of the company. Depending on the terms, significant dilution can occur when SAFE loans convert, affecting the founder's ownership share. Learn how to get an estimate of your SAFE conversion with SeedBlink’s SAFE calculator.
As you progress, priced equity rounds become more common, especially when raising larger amounts from institutional investors. Consider the trade-offs: debt instruments like convertible notes preserve equity in the short term but can complicate your cap table later, while priced rounds provide clarity but require more time and legal costs.
Craft a solid fundraising strategy aligned with long-term goals - Start by defining where your startup is now, what it needs, and its long-term vision. Craft your fundraising strategy around these points, ensuring every dollar raised supports sustainable growth. Fundraising isn’t about chasing capital but attracting the right kind of capital that aligns with your mission.
Build strong financial projections - Investors need to see your financial foresight. Outline detailed projections for the next 18-24 months, including expected expenses, revenue, and cash flow. This – beyond being an exercise in numbers—it’s a chance to prove your strategic thinking and preparedness to investors.
Identify and document key milestones - Define your goals in product development, market entry, and team growth, giving investors a clear roadmap and a view into your startup’s growth trajectory.
Set a realistic funding target with runway - Aim to secure enough capital to last 12-18 months. This runway gives you the flexibility to address challenges and opportunities without the constant pressure of finding new funding.
Be ready for surprises by including a financial buffer. Every startup faces setbacks—budget for them. Include a buffer in your financial planning to cover unforeseen expenses or slower-than-expected growth. It’s better to be over-prepared than to scramble when challenges arise.
Sharpen your pitch with a strong story - A great pitch is the story of your startup, its purpose, and the problem it solves. Craft your pitch to show your passion, highlight your team’s strengths, and demonstrate why now is the time for your solution.
Leverage networks and mentors - Your network is a resource. Engage with experienced mentors, peers, and industry experts who can offer insights and connect you with the right investors. Fundraising is tough—don’t go it alone.
Understand the instruments and options available - Familiarize yourself with funding types, sources, and tools to model different scenarios, including dilution, like this calculator. Knowledge of these financial instruments helps shape your strategy and influences your funding choices.
Set boundaries on time spent fundraising - Fundraising can be time-consuming and demanding. Be explicit in setting aside time blocks for fundraising or consider bringing on an advisor to manage this process so you can stay focused on building and scaling. Approach it with resilience, and stay honest about the process’s impact on you and your team. Mitigate stress by planning and pacing fundraising activities deliberately.
Not sure where to start, or how to best prepare for your first fundraising? Funding Sprint by SeedBlink is a pre-seed program for tech startups that aims to simplify the often lengthy and complex journey of securing investment by providing a structured, time-bound approach to connecting startups with potential investors.
It’s a founder-friendly program designed to give you the tools, guidance, and connections you need to succeed. Get started with Funding Sprint.
Raising funds is as much about building relationships as it is about securing capital. A solid network of potential investors can provide invaluable support, insight, and long-term connections that fuel your startup’s growth. Here’s how to approach it:
Invest in relationships - networking is about building meaningful, strategic connections. Attend industry events, startup competitions, and formal presentations where investors gather. Engage genuinely—connections built on authenticity often lead to the best opportunities down the line.
Leverage online tools to identify investors early - Use platforms like LinkedIn to identify relevant investors and understand their focus areas. Research their backgrounds, recent investments, and portfolio companies. Knowing what matters to an investor can make your pitch far more compelling when you do connect.
Get warm intros - A trusted introduction is one of the most powerful ways to connect with investors. Ask friends, colleagues, mentors, and other founders to introduce you to investors they know. You can also leverage your current investors for referrals. These warm connections often lead to quicker responses and more engaged conversations.
Attend industry events and competitions - Many investors scout talent at industry-specific events and startup competitions. Don’t be afraid to approach them, ask questions, and share your story. Even brief encounters can pave the way for follow-up meetings and potential partnerships.
Choose investors who offer more than money - The right investors bring strategic value beyond capital. Consider their industry expertise, networks, and their track record in supporting startups through multiple rounds. Investors who understand your market and share your vision will be invaluable partners as you scale.
Evaluate for founder-friendliness. Not all money is good money. Seek investors known for being founder-friendly - those who have a reputation for supporting entrepreneurs and fostering a healthy working relationship. Ask other founders about their experiences with potential investors to gauge this compatibility.
Use SeedBlink’s curated network - Leverage SeedBlink’s European VC network: a list of over 1,800 top-tier investors across Europe, designed to help you find the right matches for your startup. This resource connects you with the investor community who understands your sector and is committed to founder-led growth.
To convert investors, here’s a quick playbook inspired by Carnegie’s principles:
Fundraising is challenging, but a well-built network can make all the difference. Prioritize preparation, persistence, and relationship-building to strengthen your fundraising journey. Invest in people who believe in you, your vision, and the future of your company - these are the connections that will sustain you beyond this funding round.
Your pitch deck is often the first substantial interaction potential investors will have with your company, and it needs to tell a concise, engaging, and convincing story.
Here are the main elements that a complete pitch deck often include:
Remember that your pitch deck should be visually appealing and easy to digest. Use clear, concise language and compelling visuals to convey your message. Each slide should have a clear purpose and contribute to your overall narrative.
We've analyzed over 10,000 pitch decks across various industries and conducted in-depth interviews with hundreds of VCs and angel investors, leading us to develop a comprehensive understanding of what makes a pitch successful.
Use SeedBlink's "Pitch Perfect" tool to improve your pitch presentation.
A well-communicated funding round can attract top talent, spark interest from potential customers and partners, and set the stage for future funding opportunities. Moreover, it sends a strong signal to the market about your company's potential and investors' confidence in your vision.
It's not just about announcing a number. It’s about engaging different stakeholders - from employees and customers to industry analysts and future investors. Here are our top recommendations before and after a fundraising round:
Learn more on how to communicate your fundraising round efficiently from our complete guide below!
The characteristics, expectations, and goals of investors vary at each stage, from pre-seed to Series A and beyond, and knowing how to approach and select the right ones can make a huge difference in securing the capital you need.
Each stage requires different types of investors with specific expertise, risk tolerance, and return expectations. Here are our recommendations for each fundraising round:
At the pre-seed stage, you’re essentially working to turn an idea into a real business, so investors here tend to be those who believe in you as a founder, often more so than in your specific product or market.
Many times, founders rely on their network, reaching out to friends, family, and early believers willing to provide small amounts of capital to get the business off the ground. Pre-seed investors are usually comfortable with less formal structures, and the focus here is on building relationships and trust rather than on polished financials.
To look for pre-seed investors, we recommend:
Seed investors are looking for startups that show potential for growth and scalability. These investors might include venture capital (VC) firms specializing in early-stage investments, angel groups, or even family offices focusing on backing promising startups.
To find the right seed investors, it’s important to target those who specialize in your industry or have a track record of supporting companies at this stage. To look for pre-seed investors, we recommend:
Investors at this stage are typically larger venture capital firms with more institutional money to deploy. They are looking for companies that can scale quickly and dominate their market. Series A investors are more focused on long-term value, and they’ll want to see detailed financial metrics, a well-established customer base, and a solid team with a track record of execution.
From now on, growth-stage and late-stage investors are often more hands-off in day-to-day operations but will expect a clear roadmap for an exit, whether through acquisition or an IPO.
To look for pre-seed investors, we recommend:
Your business plan it’s the blueprint of your company’s vision, strategy, and growth potential.
Investors need to see a clear, no-fluff document that outlines your business model, target market, competitive landscape, and key growth milestones. Include sections that cover how your product or service solves a real pain point, why your team is uniquely equipped to tackle it, and a roadmap for how you’ll go from concept to market leader. Clarity is key here; keep jargon to a minimum and let the data and strategy speak for themselves.
Do's: Be specific about your market and customer needs, quantify traction, and back up claims with data wherever possible. Highlight differentiators in your approach and outline a realistic roadmap with milestones that give investors confidence in your execution ability. If you own IPs, make sure to highlight that.
Don’ts: Avoid over-promising or creating unrealistic timelines. Don’t focus solely on product—cover market fit, scalability, and business model. Skip long-winded sections and focus on concise points that deliver a powerful, clear story.
Download a free Forbes business plan structure from here.
Financial projections are where your startup’s future takes shape.
They show your revenue potential, cash flow, expenses, and profitability over the next 18-24 months, grounded in data and realistic expectations. These projections shouldn’t be aspirational fluff but calculated numbers based on sound market and business knowledge. Investors want to see detailed assumptions and revenue streams along with growth and operational costs. Having solid projections also gives you a clear cash runway to inform future funding needs.
Do's: Use templates for your financial forecasts to structure them professionally, and consider a simulation tool (like SeedBlink’s) to model potential outcomes and dilution scenarios. Be conservative in your projections, allowing a buffer for unknowns, and show how your projections align with key milestones.
Don’ts: Don’t gloss over expenses or cash flow details; investors know where startups commonly underestimate. Avoid vague or overly ambitious figures and ensure your projections align with industry standards, leaving room for potential adjustments.
Equity dilution calculator
Understand how your current ownership stake may be diluted over time.
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Ownership target calculator
Determine the capital required to achieve your desired percentage of ownership.
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SAFE calculator
Understanding the conversion terms of a SAFE (Simple Agreement for Future Equity).
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