VC funding benchmarks for startups

FUNDRAISING GUIDE

Due to popular demand, we've updated our VC funding benchmarks guide for startup founders preparing to fundraise from very-early stage to late stage.

"The best startups would push the frontier of technology, thereby guaranteeing market power and selling opportunities for their products." (Thomas J. Perkins, Co-founder of Kleiner Perkins)

"Back the right people. People make products. Products don't make people. Only a tiny percentage of people possess the managerial and motivational capabilities to build extraordinary growth companies." (Thomas J. Davis, Jr., Co-founder of Mayfield Fund)

If you're preparing to fundraise for capital, may you find these recommended readings helpful to increase your fundability in the changing landscape of venture capital market, particularly during this market downturn.

• The changing venture landscape by Mark Suster
• The valuation vs. traction matrix by Jason Calacanis
• From an idea to a minimum viable product: in a startup context by George Krasadakis
• The five ingredients of a successful startup pitch by Romeen Sheth
• Fundraising in 2022: where we are & where we're going by Tomasz Tunguz

If you're new to venture capital funding, check out these videos:

• [Beginner] If you know nothing about venture capital, watch this first by Forbes
• [Intermediate] Venture capital explained in 5 minutes by Rob Walling
• [Advanced] Venture capital defined: structure & lifecycle of VC funds by Professor Claudia Zeisberger

By the way, here's the embedded Google Sheets for your ease of reference.

If you wish to estimate your pre-revenue business valuation with proven models and frameworks, try our free pre-revenue business valuation simulator.

👉 Simulation (pre-revenue #business #valuation)

Most aspiring founders don't know how to effectively derive their pre-revenue valuation, now they can with industry standards and frameworks. pic.twitter.com/ECBK32w2Fd

— roiquant (@roiquant) September 26, 2021

Authors

1. Paul Lee, Co-founder & CEO, roiquant
2. D. T. C. Lai, Co-founder & Chief Researcher, roiquant
3. Josshua Chong, Associate Data Scientist, roiquant

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References

Calacanis, J. (2019). The valuation vs. traction matrix. Retrieved 31 August 2022, from https://calacanis.com/2019/03/30/the-valuation-vs-traction-matrix/

Destin, F. (2022). How Stride VC looks at startup progress levels. Retrieved 29 August 2022, from https://twitter.com/fdestin/status/1530112598242430979

Fanning, S., Poyar, K., & Kenyon, T. (2021). 2021 financial & operating benchmarks report. Retrieved 28 August 2022, from https://openviewpartners.com/2021-financial-operating-benchmarks-report/

Forbes. (2016). If you know nothing about venture capital, watch this first. Retrieved 1 September 2022, from https://youtu.be/a4aUX5u90oA

Hillenbrand, P., Kiewell, D., Ostojic, I., & Springer, G. (2021). Scale or fail: how incumbents can industrialize new-business building. Retrieved 31 August 2022, from https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/scale-or-fail-how-incumbents-can-industrialize-new-business-building

Index Ventures. (2017). Rewarding talent: a guide to stock options for European entrepreneurs. Retrieved 29 August 2022, from https://www.indexventuers.com/rewardingtalent/

Janz, C. (2019). What does it take to raise capital, in SaaS, in 2019? Retrieved 19 September 2020, from https://medium.com/point-nine-news/what-does-it-take-to-raise-capital-in-saas-in-2019-26829debef29

Kendall, J. (2021). Understanding the pre-seed ecosystem. Retrieved 30 August 2022, from https://vc-list.com/pre-seed-ecosystem/

Krasadakis, G. (2019). From an idea to a minimum viable product: in a startup context. Retrieved 31 August 2022, from https://speakerdeck.com/gkrasadakis/from-an-idea-to-a-minimum-viable-product

Murray, B. (2022). Funded SaaS companies. Retrieved 29 August 2022, from https://www.thesaascfo.com/funded-saas-companies/

Point Nine. (n.d.). SaaS funding napkin (2016-2022). Retrieved 28 August 2022, from https://twitter.com/roiquant/status/1280344866518523904

Polovets, L. (2022). Expectations for preseed vs seed vs series A rounds. Retrieved 30 August 2022, from https://twitter.com/lpolovets/status/1547046895125532672

Powell, C. (2022). Conviction in venture capital funding. Retrieved 30 August 2022, from https://www.linkedin.com/posts/courtneyjpowell_startups-vc-venturecapital-activity-6919966231508766720-o5_4/

Quintero, S. (2019). Predicting a startup valuation with data science. Retrieved 29 August 2022, from https://medium.com/journal-of-empirical-entrepreneurship/making-sense-of-startup-valuations-with-data-science-1dededaf18bb

Read, C. (2018). 2018 startup cash burn report: benchmarking spend. Retrieved 29 August 2022, from https://www.brex.com/blog/burn-rates/

Roiquant. (2022). Venture capital funding benchmarks for startups. Retrieved 30 August 2022, from https://go.roiquant.com/vc-funding-benchmarks

Roiquant. (n.d.). Pre-revenue business valuation simulation. Retrieved 10 June 2022, from https://www.roiquant.com/simulation/founders/pre-revenue-valuation

Sheth, R. (2021). The five ingredients of a successful startup pitch. Retrieved 31 August 2022, from https://twitter.com/romeensheth/status/1381029062219599874

Singh, P. (2018). Raising seed capital? Here's my guide on how to do it successfully. Retrieved 19 September 2020, from https://medium.com/swlh/raising-seed-capital-heres-your-2018-guide-on-how-to-do-it-successfully-c73c42530598

Singh, P. (2022). Evaluation criteria in VC fundraising from preseed to growth rounds. Retrieved 1 September 2022, from https://twitter.com/parulia/status/1565109614227509249

Roychowdhary, A. & Pawar, P. (2022). Surge by Sequoia: pitfalls in finding PMF (product-market fit).Retrieved 1 September 2022, from https://www.linkedin.com/posts/surgeahead_pmf-activity-6968497488072753152-Kv-Z/

Suster, M. (2021). The changing venture landscape. Retrieved 31 August 2022, https://bothsidesofthetable.com/the-changing-venture-landscape-6b655c68e631

Tunguz, T. (2022). Fundraising in 2022: where we are & where we're going. Retrieved 1 September 2022, from https://tomtunguz.com/fundraising-environment-2022-08-19/

Walling, R. (2022). Venture capital explained in 5 minutes. Retrieved 1 September 2022, from https://youtu.be/g8k8-o7NXVw

Zeisberger, C. (2020). Venture capital defined: structure & lifecycle of VC funds. Retrieved 1 September 2022, from https://youtu.be/zDUpaC7mkyc

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Last edited on 3 November 2022.