Bruce Crawford from NONA Technologies just closed their first round (seed or pre-seed, depending on the nomenclature), and he wrote:
I’d honestly say that’s about right for a seed round. I think we could get away with being a 3 even. I think investors care how long until revenue (one tech could get there from 2 faster than another could get there from 5), and they care about how big the end vision is.
At 5/6, I’ve always felt more than enough developed for this funding stage.This blog post suggests that Pre-seed funding is for closing out science risk (research stage) and starting to tackle engineering risk (prototype stage). Seed funding is for closing out the prototype and completing a customer pilot.
Based on CTVC, this might be roughly right for round sizes:
- Pre-seed (~$1M) 3-5 years until revenue
- Seed (~$5M) : 1-2 years until revenue
- Series A (~$20M): Early revenue (pilot)
- Series B (~$50M): YoY revenue (commercial)
This blog post argues that TRL 5-7 is the sweet spot for angel investors and early-stage climate tech investors. The author says:
according to technology case studies by the European Patent Office, startups at TRL 5 to 7 have the highest ROI potential, with a median return of 23.2% compared to 19.4% for startups at TRL 8 and above.
Here is a good definition of TRL: https://www.dst.defence.gov.au/sites/default/files/basic_pages/documents/TRL%20Explanations_1.pdf