The earliest money into a startup is invested before there is any real data. There is usually no revenue, often no product, and sometimes no company. Angels, accelerators, pre-seed funds and seed funds underwrite a team, an insight and a market, and they price the risk with instruments (SAFEs and convertible notes) built to postpone the valuation argument. This is the stage where the power law is most extreme: most cheques go to zero, and a single position can return a seed fund several times over.
What the study covers
- 1Overview: what "early" means now
- 2The players
- 3Mechanics
- 4Key numbers
- 5Landmark deals and cases
- 6Pitfalls
- 7How an expert thinks about it
- 8Glossary
- 9Related sections
Technical exhibits
Worked examples, checklists and case studies included with this study.
Safe Conversion Worked Example
Two post-money SAFEs converting into a priced seed round with an option-pool top-up, plus a pre-money SAFE comparison (computed in Python)
Seed Portfolio Construction and Power Law Math
Monte Carlo of portfolio size against outcomes, the "return the fund" test, and reserve sizing for seed funds (stylized)
Seed and Angel Deal Checklist
A one-page checklist covering team, market, round construction, instrument terms and legal hygiene