I think we can all agree that early stage investing has changed significantly over the past 10 years and I don’t see it reversing any time soon. And by “changed significantly” I mean it is increasingly difficult to raise the $100K – $2M necessary to move from the pre-seed stage (where you likely raised $10-$100K from friends and family or your 401(k)) to raising institutional venture capital (~$2M +). This gap straddles two stages of financing - seed stage and early stage. For purposes of this post, I’ll refer to this gap as the “early stage gap”. The companies looking to raise money in this early stage gap are generally past the proof of concept stage, are not yet ready to blow it out with institutional venture financing or growth capital, and are looking for additional capital to continue building out their product or service and gain the elusive “traction” (see my earlier thoughts here on the “traction” concept) necessary for raising larger sums of money at a decent valuation.
To read the full, original article click on this link: Are True Early Stage Investors an Endangered Species? | VC Deal Lawyer
Author: Chris McDemus
