Fundraising in Web3 is similar to commonly known startup fundraising rounds and procedures, for the most part. The following chart will give you an overview with some Web3 specific observations.
Stage | Pre-Seed Round | Seed Round | Series A/Treasury Round |
Raise | < $ 1 Million | $ 1-5 Million | $ 10-20 Million |
Valuation | $ 2-6 Million | $ 10-50 Million | $ 100-200 Million |
Instrument | - SAFE/Convertible Note +
Token Side Letter/Token Warrant | - SAFE/Convertible Note +
Token Side Letter/Token Warrant
- SAFT | - Token Purchase Agreements
- OTC deal |
Network Percentage | 1-10 % of Token Supply | 5-15 % of Token Supply | ≈ 5 % of Token Supply |
Investor Type | Family, Friends, Grants, Angel Funding, Venture Capital | Venture Capital | Venture Capital (Series A) |
Stage Description | - Initial product Idea
- Founding team is in place
- Product is in development
- Proof of Concept, Prototype, MVP | - Product / Solution Fit
- Product Development
- Building the team: 1-2 hires
- Go To Market | - Product is developed
- scalable
- gaining traction sustainably
- increasing hiring
- improving processes |
Web3 Specific
Stage Description | - Pre-Testnet (6-12 months)
- Protocol MVP in Place
- Defining Lightpaper
- Defining Tokennomics | - Pre-Testnet (1-3months) or live testnet
- Mainnet launch 1-5 month
- Whitepaper defined
- Token Design defined
- Community Building | - Post Mainnet
- Deploying additional features
- Scaling |
Risk Mitigation | Hiring:
- Hiring and putting a team in place | Product:
- Things that could go wrong with the service, software | Go To Market Risk:
- Reach target customers and achieve competitive advantage |
Legal Structure | Developer Company | Developer Company / Token Issuer | Foundation |