The seed stage financing round for tech startups has been fractured into multiple pieces, each with a different purpose. If you're a founder raising, here is the current landscape to know.

1. ATOMIZATION
and what this means
for entrepreneurs
OF SEED-STAGE VC ROUNDS
the

2. What’s Happening:
Seed was previously (1) a single
funding round and (2) one part of a
linear path of VC rounds startups raise.

3. What’s Happening:
Seed was previously (1) a single
funding round and (2) one part of a
linear path of VC rounds startups raise.
Today, however, we’re seeing
something much different à

4. Seed has been fractured into
smaller parts to be re-assembled
in bespoke fashion by founders.

5. What’s Happening:
Instead of one generic idea of
“seed,” there are many
variations, each with slightly
different purposes.

6. What’s Happening:
And instead of one linear path
(seed, Series A, Series B, etc.), founders
are creating many different fundraising
paths based on the specifics of their
business and milestone achievements.

7. What’s Happening:
So how did we get here?
Let’s break it down, starting in the year
we launched NextView (2010) à

8. 2010:
We started NextView to fill a need, especially on the East
Coast. Seed was barely considered a go-to first round, as
Series A VCs often invested pre-product/market fit (PMF).

9. 2010:
Along with several contemporaries, we emerged as
seed became THE preferred initial round.
We started NextView to fill a need, especially on the East
Coast. Seed was barely considered a go-to first round, as
Series A VCs often invested pre-product/market fit (PMF).

10. Over Time:
The venture market evolved to a point where seed
was indeed dubbed the “new Series A,” as Series A
investors sought mainly post-PMF companies.

11. Over Time:
The venture market evolved to a point where seed
was indeed dubbed the “new Series A,” as Series A
investors sought mainly post-PMF companies.

12. WHAT’S HAPPENING:
However, shortly after it became the
prototypical first round of institutional
capital for pre-PMF startups,
seed was then smashed into pieces.

13. The Atomization of Seed

14. The Atomization of Seed
(Moved further out.)

15. The Atomization of Seed
Additionally, instead of one standard path, founders
today are able to re-assemble the atomized seed
round according to the specifics of their business.

16. The Atomization of Seed
Additionally, instead of one standard path, founders
today are able to re-assemble the atomized seed
round according to the specifics of their business.

17. What’s Happening:
There are a few immediate
ramifications founders should know.
(After that, we’ll explore the two factors that caused this trend.)

18. Ramifications Founders Need to Know
Think about “seed” not as one round but as a stage
that can encompass multiple financings. This
should help you be more thoughtful about what
milestones you need to hit to then raise.
1 2 3
ß “Seed” à
(True to our original vision,
NextView invests across the
spectrum regardless of labels.)

19. Ramifications Founders Need to Know
Pre-seed can be viewed as a way to raise a more
appropriate amount of capital while bringing on
sophisticated investors early. Founders can also
minimize net dilution (vs. larger initial seed rounds)
while keeping the door open for quick injections of
capital at the seed if things begin to work quickly.
1 2 3
ß “Seed” à

20. Ramifications Founders Need to Know
1 2 3
ß “Seed” à
Here’s how NextView makes
pre-seed investment decisions >>

21. Ramifications Founders Need to Know
At the other end of the seed spectrum, the stigma
around second-seeds (or “seed extensions”) is slowly
eroding. In fact, firms like ours actually find many
second-seeds attractive, particularly in B2B SaaS.
1 2 3
ß “Seed” à

22. WHAT’s HAPPENING:
So what are the two aforementioned
factors that caused the atomization of
seed VC in the first place?
(We’ll then conclude with a crucial warning for all involved.)

23. WHAT’s HAPPENING:
The cause of this atomization sits at the
intersection of two trends:
1. Startups require less capital to start.
2. Series As require more proof of PMF.

24. TWO SEEMINGLY DIVERGENT FACTORS
Seed-stage startups
require less capital.
Series A VCs mainly seek
post-PMF traction.

25. TWO SEEMINGLY DIVERGENT FACTORS
Seed-stage startups
require less capital.
Series A VCs mainly seek
post-PMF traction.
So at the very same time,
entrepreneurs can do more
with less capital but are
required to do more to raise it.

26. TWO SEEMINGLY DIVERGENT FACTORS
Seed-stage startups
require less capital.
Series A VCs mainly seek
post-PMF traction.
So at the very same time,
entrepreneurs can do more
with less capital but are
required to do more to raise it.
(This makes assembling
multiple seeds rather useful.)

27. WHAT’s HAPPENING:
Here’s the crucial warning in all of this.
It has to do with why anyone builds
companies in the first place à

28. WHAT’s HAPPENING:
The point of your startup isn’t to raise
money. The point is to build something
meaningful for your customers, your team,
your investors, and yourself.
So, remember à

29. DON’T LOSE SIGHT
OF THE FOREST
FOR THE TREES.

30. DON’T LOSE SIGHT
OF THE FOREST
FOR THE TREES.
All this parsing of seed can be misinterpreted as small
ball. But while it’s important to be milestone-driven, it’s
paramount to have a bigger story and mission driving
your company well beyond the seed stage
(regardless of how many “seeds” exist).

31. IN THE END:
This atomization is simply the reality we’re
seeing. It’s not a belief we have, nor are we
passing judgment on if it’s good or bad.

32. IN THE END:
This atomization is simply the reality we’re
seeing. It’s not a belief we have, nor are we
passing judgment on if it’s good or bad.
In sharing this, we hope we’ve clarified
the current climate so you can focus on
what really matters in your work.

33. WANT TO LEARN MORE?
NextView’s David Beisel explores
everything from this presentation in
much more detail here:
Read the Full Essay >>