What it takes to raise a Seed

Surbhi Rathore, CEO and Co-Founder, Rammer.ai

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Seed round short Q&A

Last May I featured Surbhi Rathore's perspective on her company's participation in the 2019 Techstars Seattle accelerator program. Three and a half months later, Surbhi and the Rammer.ai team closed a $1.8 million Seed round. Here are key takeaways from her fundraising journey. 

How many investors did you pitch (approximately) to close the round? 

We ended up having meetings with less than 30 or so investors. We were very targeted in the approach of only reaching out to the firms with some investment thesis around Enterprise AI or platforms. And it was a pleasure to get connected with each of them. 

What about your company's story changed or evolved as you pitched? What narrative worked best? 

Every meeting was a new learning experience that gave us further clarity on handing the objections. One of the things I learned was making sure we communicate the vision in the right proportion to what exactly we are doing near-term. I would say in the end it was the strength of the founding team, the founder's insights in the market and what hypothesis we are validating, with a clear understanding of how we will get to the next stage. 

How will you use the proceeds? 

With this Seed round we will expand the engineering and data science teams to scale the platform and make it easy for developers to adopt this technology. We are also investing in business fundamentals to grow, acquire, and delight both customers and partners.

What people or groups were most helpful throughout the fundraising process, and how? 

Techstars helped us immensely with the support system and access we needed to the right investors. Not just the entire Techstars team, but the alums from previous batches and mentors helped us with introductions and sharing the knowledge of what worked for them. It's always faster to learn from others' experiences and apply to your own journey. 

Anyone you want to give a special shoutout? 

Chris DeVore, Aviel Ginzburg and all our mentors during the Techstars program. Our entire team in India who stepped up to take more responsibilities as I (alongside Toshish Jawale, my co-founder) went through our first fundraise process. We are so excited to unfold the next phase.

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What is a Seed round?

Here's an overview from Investopedia's Series A, B, C Funding: How It Works...

Seed funding is the first official equity funding stage* and typically represents the first money that a business raises. Some companies never extend beyond Seed funding into Series A rounds or beyond.

You can think of the "seed" funding as part of an analogy for planting a tree. This early financial support is ideally the "seed" which will help to grow the business. Given enough revenue and a successful business strategy, as well as the perseverance and dedication of the founders and investors, the company will hopefully grow into a "tree."

Seed funding helps a company to finance its first steps, including things like:

• Market research and product development to dial in product-market fit

• Hiring a founding team, or expanding the team  

*I'm seeing more Pre-Seed rounds pop up on Crunchbase (there are two listed below in this week's update). Funding for a Pre-Seed business normally comes from the 3F’s (Friends, Family and Fans). The amount of money is usually small (under $1 million) because the business is still in the idea or conceptual stage. That said, both of this weeks's Pre-Seeds are $1 million and above (Airspace Link, $1 million; Kensho, $1.3 million). 

Investors, I'd love your insight on the Pre-Seed trend. Contact me.

Weekly Female Founder Funding Update

MOD Super Fast Pizza, $160 million, private equity, Ally Svenson, Co-Founder and Director
Bellevue-based fast casual pizza brand. Led by private-equity investment firm Clayton, Dubilier & Rice. The investment will continue to fuel MOD’s growth plans and expansion to reach 1000 locations in the next five years. Including this round, MOD has raised $335 million to date. (Website, Crunchbase)

Notable:

“Consumers are leaning in to brands that are more relevant, that are delivering a product and an experience that’s more in keeping with what they’re looking for today, “ said Scott Svenson, CEO.

Svenson also points to the chain’s commitment to social impact as crucial to its success. MOD recruits workers who might otherwise struggle to find employment, including people who were previously incarcerated. Perks such as higher pay, free meals, and a fund that employees can access during emergency situations help build culture and reduce turnover, Svenson says. (Business Insider)

Modsy, $37 million, Series C, Shanna Tellerman, Co-Founder and CEO
San Francisco-based ecommerce company that creates 3D renderings of customized rooms and allows customers to purchases recommended products. Round led by TCV, bringing Modsy’s total funding to $71 million. (Website, Crunchbase)

Soda Says, $2.5 million, Seed, Grace Gould, Founder & CEO
London-based online marketplace for lifestyle tech products (go-to-market focus on sex tech). Investors include LocalGlobe. (Website, Crunchbase)

Talkspace, $50 million, Series D, Roni Frank, Co-Founder
New York-based provider of therapy via a subscription-based online platform. Round led by Revolution Growth. The New York company’s model involves connecting users with a network of over 5,000 licensed therapists through a web and mobile platform. (Website, Crunchbase)

Weekly Female Founder Funding Update: More Unicorns

Away, $100 million, Series D, Steph Korey, Co-Founder & CEO, and Jen Rubio, Co-Founder
New York-based online luggage retailer Away raised $100 million in funding at a $1.4 billion valuation. Wellington Management led the round, and was joined by investors including Baillie Gifford, Lone Pine Capital and Global Founders Capital. Away, which said its 2018 sales totaled $150 million, is planning to use some of the new capital to expand into apparel, wellness and lifestyle accessories. (Website, Crunchbase)

Nextdoor, $123 million, Series F, Sarah Friar, CEO
San-Francisco-based neighborhood social network is now valued at $2 billion. It’s the company’s first round since Friar took over, with the cash set to fund international expansion. Riverwood Capital led the round, joined by investors including Benchmark, Tiger Global Management and Kleiner Perkins. (Website, Crunchbase)

Core, $4 million, Seed, Sarah McDevitt, Founder & CEO
San Francisco-based meditation experience and personalized wellness company. Spero Ventures led the round, joined by investors including Bolt , Corigin Ventures and Stanford-StartX Fund. (Website, Crunchbase)

Hatch, $5 million, Series A, Ariane Goldman, Founder
New York-based lifestyle brand for women before, during and after pregnancy, raised $5 million in Series A funding. Silas Capital led the round, joined by investors including M3 Ventures. (Website, Crunchbase)

Weekly Female Founder Funding Update

Daye, $5.5 million, Seed, Valentina Milanova, Founder & CEO
London-based femtech company. Their first product is a tampon that uses CBD tp help tackle dysmenorrhea, raised $5.5 million in funding. Investors include Khosla Ventures, Index Ventures and Kindred Capital. (Website, Crunchbase)

LunaPBC, $4.6 million, Dawn Barry, President & Co-Founder
La Jolla, Calif.-based provider of a genomics and health data platform. Investors include ARCH Venture Partners, Bain Capital Ventures, F-Prime Capital, Illumina Ventures and Osage University Partners. (Website, no Crunchbase listing)

Vice Media, $250 million, Debt Financing, Nancy Dubuc, CEO, Anne Gaviola, Founder
Brooklyn-based a global youth media company, engages in print, event, music, online, television (TV), and feature film business activities in the United States and internationally. Investors include 23 Capital, Soros Fund Management, Fortress Investment Group LLC and Monroe Capital. (Website, Crunchbase)

Weekly Female Founder Funding Update

Carrot Fertility, $11.5 million, Series A, Tammy Sun, Co-Founder & CEO, Dr. Asima Ahmad, Co-Founder, Medicine, and Juli Insinger, Co-Founder, GrowthSan-Francisco-based provider of fertility health plans to companies. CRV led the round. (Website, Crunchbase)

EverlyWell, $50 million, Series A, Julia Cheek, CEO & Co-Founder
Austin-based digital health platform that provides at-home health tests and lab results. Investors include, Goodwater Capital, Highland Capital Partners, Next Coast Ventures, NextGen Venture Partners, and SoGal Ventures. They also announced a partnership with Target to roll out its tests in more than 1,600 stores. (Website, Crunchbase)

Kids on 45th, $3.3 million, Seed, Elise Worthy, CEO
Seattle-based e-commerce reseller of gently used children’s clothing. Interesting, the company originated as a beloved brick-and-mortar store in Seattle’s Wallingford neighborhood. Two years ago it was purchased by Elise Worthy, who also founded Ada Academy. Investors include YesVC, an early-stage firm co-founded by Flickr co-founder Caterina Fake; Maveron, SoGal Ventures, Sesame Street Ventures, Collaborative Fund, Liquid 2 VC, and Brand Foundry Ventures. (Website, Crunchbase)

MyVillage, $6 million, Seed, Erica Mackey, CEO & Co-Founder, and Elizabeth Szymanski, Co-Founder and CFO
Bozeman, Montana-based childcare system that works with a community of in-home childcare programs. Investors include Red Sea Ventures, Acumen, Better Ventures, and Kairos. (Website, Crunchbase)

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Weekly Female Founder Funding Update

Cleo, $27.5 million, Series B, Chitra Akileswaran and Shannon Spanhake, Co-Founders
San Francisco-based supplemental benefits company that partners with enterprises like Uber, Pinterest, LinkedIn and Slack to offer supplemental benefits to working parents. Greylock Partners and Forerunner Ventures led the round. Cleo has an all-female, three-person board. (Website, Crunchbase)

Glossier, $100 million, Series D, Emily Weiss, Founder and CEO 🦄
New York-based direct-to-consumer beauty products retailer. Sequoia Capital led the round, joined by Tiger Global Management, Spark Capital, Forerunner Ventures, Thrive Capital, IVP, and Index Ventures. The financing sets a $1.2 billion valuation. (Website, Crunchbase)

Henry the Dentist, $10 million, Series A, Alexandria Ketcheson, Co-Founder and Chief Brand Officer
New Jersey-based mobile dental practice. Forerunner Ventures led the round, joined by Brand Foundry and Trail Mix Ventures. (Website, Crunchbase)

Maude, $1.5 million, Seed, Eva Goicochea and Dina Epstein, Co-Founders and CEO and CPO, respectively
New York-based sex essentials company, Tune House Capital led the round, joined by RRE, CASSIUS Family, Outbound Ventures, Shrug Capital, and Pico Alto Ventures. (Website, Crunchbase)

Rent the Runway, $125 million, Venture Round, Jennifer Hyman and Jennifer Fleiss, Co-Founders and CEO and Head of Business Development , respectively 🦄
New York-based e-commerce website that rents designer apparel and accessories. Investors included Franklin Templeton Investments, Bain Capital Ventures, and T. Rowe Price. (Website, Crunchbase)

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🦄 Other Female Founded Unicorns 🦄

23andMe — Anne Wojcicki and Linda Avey, Co-Founders and Co-CEOs

Nextdoor — Sarah Leary and Madison Bell, Co-Founders and VP of Marketing and Operations and Chief Product Officer

Cloudflare — Michelle Zatlyn, Co-Founder and COO

Credit Karma — Nichole Mustard, Co-Founder and Chief Revenue Officer

Houzz — Adi Tatarko, Co-Founder and CEO

Eventbrite — Julia Hartz, Co-Founder and CEO — IPO’d in September 2018

Weekly Female Founder Funding Update

Amun, $4 million, Seed, Ophelia Synder, Co-Founder and Chief Product Officer
Switzerland-based Amun is a company that wants to make buying crypto as easy as stock. Investors can invest in crypto easily, safely, and in a regulated way on the SIX Swiss Exchange. Round led by BoostVC. (Website)

Fairy Godboss, $10 million Series A, Romy Newman, Georgene Huang, Co-Founders
New York-based, female-focused professional networking platform focused on gender equality. Round funded by Signal Peak Ventures, GSV AcceleraTE. (Website)

Girls Who Code, $3 million, Grant, Reshma Saujani, Founder and CEO
New York-based edtech non-profit organization working to close the gender gap in technology. Through its Summer Immersion Programs and Clubs, Girls Who Code seeks to provide computer science programming for girls in rural areas. Grant round led by Walmart. (Website)

OOVA, $1 million, Seed, Amy Divaraniya, Co-Founder and CEO
New York-based fertility diagnostic company spun out from Mount Sinai Hospital. Special Situations Life Sciences Innovation Fund led the round. (Website)

Serial Box, $4.5 million, Seed, Molly Barton, CEO and Co-Founder
NYC-based provider of serialized entertainment for readers and listeners. Investors include Forerunner Ventures, Boat Rocker Media and Uzabase. (Website)

Weekly Female Founder Funding Update

Crunchbase released an analysis that shows over $8 billion in funding internationally has gone to women-led companies since the start of 2019. 

Here are the biggest deals:

The rundown:

Grab, $1.46 billion, Series H, Tan Hooi Ling, Co-Founder
Singapore-based ride-sharing service. SoftBank Vision Fund led the raise.

Horizon Robotics, $600 million, Series B, Annie Tao, Co-Founder, VP Operations
Beijing-based AI for robots. Investors include Morningside Venture Capital, Hill House Capital, Sequoia Capital, GSR Ventures, Linear Venture, Innovation Works, ZhenFund, Wu Capital, Tsing Capital, and Vertex Ventures.

DaDa, $255 million, Series D, Hui Zhi, Founder and CEO
Shinghai-based online English training institution for one-on-one online tutoring. Investors include Warburg Pincus, TAL Education Group and Yonghua Capital.

Zilingo, $226 million, Series, D, Ankiti Bose, Co-Founder and CEO
Singapore-based online fashion marketplace. Round investors include Temasek Holdings, Sofina, Sequoia Capital India, EDBI, Burda Principal Investments and Angel Capital Management.

Relex Solutions, $200 million, Series Unknown, Joanna Smaros, Founder and Director, Scandinavia
Finnish retail and supply chain system. Led by TCV.

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From that same Crunchbase analysis, Underwire discovered three missed raises by U.S. companies:

Confluent, $125 million, Series D, Neha Narkhede, Co-Founder and CTO
Palo Alto-based streaming platform, backed by Sequoia. (Website)

Andela, $100 million, Series D, Christina Sass, Co-Founder and COO
New York-based distributed engineering teams with Africa’s top software developers, led by Generation Investment Management. (Website)

ImpactAlpha, $100 million, Zuleyma Bebell and Avary Kent, Co-Founders
Berkeley-based, investment news media organization. Led by Equilibrium Capital. (Website)

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Funding update for week of March 11, 2019

KonMari Media, $40 million, Marie Kondo, Founder
Marie Kondo, the author, businesswoman, and personality behind the popular Netflix series “Tidying Up,” is reportedly in talks to raise up to $40 million in venture funding to scale her personal media brand, KonMari Media. Details undisclosed. (Website)

Kuli Kuli, $5 million Series B, Valerie Popelka, Anne Tsuei, Lisa Curtis, Co-Founders
Oakland-based superfood brand. Griffith Foods led the round, joined by eighteen94 capital, InvestEco, S2G Ventures, Authentic Ventures, VilCap Investments and Rocana Venture Partners. (Website)

Luminary Media, $60 million, Series Unknown, Lauren Perkins, Co-Founder, Head of Talent
New York-based podcast subscription service. Notably, they haven’t launched an actual product. Lead investor was New Enterprise Associates. Two male co-founders. (Website)

Max-Bone, Undisclosed, Parisa Fowles-Pazdro, Founder and CEO
Los Angeles and New York-based pet label, raised Series A funding of an undisclosed amount. Colle Capital led the round, joined by investors including Cooley LLP. (Website)

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SheEO 2019 U.S. Finalists

SheEO offers another path to funding for majority woman-owned companies with at least $50,000 in revenue and mission to better humanity.

This year’s U.S. Finalists:

• BioCellection

• Farm From a Box

• Tyga Systems

• S.O.U.L. Sisters

• Solstice

Learn more about SheEO and this year’s global ventures.