Raise a priced round faster

A funding round is when a company raises money from one or more investors. Typically a startup receives investment in exchange for equity in the company.

Startup funding is organized into different rounds according to the startup’s stage of development. Each investment stage usually only gives the startup enough capital to get to the next stage.

This works for investors, because they can put in a smaller amount of money and wait to see whether their investment leads to the growth they expected before investing again. It’s a way to limit the investor’s risk.

For startups, raising in rounds means they can put the investment amount towards achieving specific goals and then raise again at a higher valuation.

Broadly speaking, the distinct funding rounds in the life of a startup are

Pre-seed or Bootstrap
This is the very first stage of funding and usually the investors are the founders themselves, or friends and family of the founders. The pre-seed funding gives the startup just enough to get basic operations off the ground.

Seed
This is the first funding stage in which the startup seeks a formal investment from an external investor, such as an angel investor or a venture capital fund that specializes in early-stage startups.

The money raised during a seed round is often used to conduct market research, make key hires, build a minimum viable product (MVP) and test the product to prove product market fit.

Series A
Series A funding comes in when a startup can show traction in the market and that it is ready to scale. Companies typically use Series A funding to grow the team and continue developing the product and business.

Series B, C and beyond
If the company needs to raise funding to continue to grow, the next rounds are called Series B, C, D and so on.

How long a funding round takes depends on many factors, including the complexity of the deal terms and personalities of the investors and founders involved.

From negotiating the Term Sheet to completing due diligence, gathering signatures and waiting for funds, the average funding round can take one to two months.

At SeedLegals, we’re focused on helping you close your round quickly and efficiently. We think six weeks is a realistic time-frame to complete your round.

With SeedLegals, instead of working to an expensive lawyer’s schedule, you get immediate access to expertly written and reviewed documents based on NVCA model documents. You create the documents you need and cut out the middleman.

The main documents you need to raise a funding round include:

• Amended and Restated Certificate of Incorporation
• Stock Purchase Agreement
  
• Investor Rights Agreement
  
• Voting Agreement
• Right of First Refusal and Co-Sale Agreement
• Management Rights Letter
• Corporate Consents
  
• Other ancillary documents, such as the Indemnification Agreement for directors and officers

With SeedLegals, you can generate all these documents instantly and they update automatically whenever you make any changes to your terms.

Yes, every time you do a funding round, you will need the approval of your board of directors and your existing stockholders.
The documents you need to do this are:

• Board Resolution
• Shareholders Resolution

When you do your funding round on SeedLegals, we’ll let you know exactly what documents you need and when you need to sign and share them.