The Difference Between Seed Round vs. Series A
Here's the difference between raising your seed round versus raising a series B or later round that you need to know if you're a founder.
I'm Robbie. I'm the founder of Competitive Storytelling. I'm a venture partner. I'm a former trial lawyer, and I've also worked with founders to raise $575 million in capital.
Now, I said there's a difference between raising a seed and a Series B. These are very different approaches that you have to take.
Now, there are some similarities. Let's get those out of the way first so you understand them.
Similarity number one, you have to be able to tell a great story.
Number two, you have to have great relationships with investors.
Number three. It's going to take you more time than you might think or want.
Once you have those understandings, we can move on to how they're different. At the seed stage, it is much more about selling the dream, selling the big idea of what the world might look like in the future.
You don't have a ton of data and numbers and traction to point towards a saying that we like to use inside of the industry. You can either sell the dream or you can sell traction. You can't sell both. The moment you start telling traction, you're no longer talking about the dream. The moment you tell the dream, you can't start talking about traction because a dream is not real.
Do not listen to the people who are going to say, don't sell a dream. It's bad, it's evil. You need to talk about real fundamentals and all this sort of stuff. It doesn't work. You are painting the picture of the future, and that is a hypothetical future that you are talking about that you believe is going to come true.
You have to hit investors in the emotional center of who they are because if you hit them in that emotional center of what could be possible, they will get involved because they wanna be a part of something cool. They wanna be a part of something big. They don't want to take a small bet. They want to take a huge bet.
So you have to get them gambling huge numbers. You need to make sure that it is big enough that they feel a little bit scared that this is a lot of money to give away. And I am scared because what if it doesn't work? But I'm also excited because what if it does? So at the seed stage, it's so much about painting the big vision.
Now the other piece that's different at seed, Is so much of your relationship building is gonna come down to just you having to go out and make those connections. You have to be the driver. Let's go into later stage series B. It could even be a series A if it's large enough. Series A, series B, series C.
When you are in those rounds, now you've gotta tell a story with data, with numbers, with traction. We're setting the frame that look at how great we've been able to do and what that means for the growth potential ahead. And what we're pointing towards with investors in that storytelling is when you give us this, 50 million or this a hundred million, here's what it's going to unlock in growth potential.
Look at our growth, and now we're gonna just pour gasoline onto the flame and watch the explode. So we have to be able to tell a story with numbers. So many founders get this wrong. They think numbers speak for themselves. They do not, I can say something a couple different ways. You have a 90% chance of surviving this surgery with no serious consequences, or I can say, You have a 10% chance of suffering, serious consequences or not making it through this surgery.
Those numbers are exactly the same. 90%, 10% talking about the same thing here, except people respond to it entirely differently. The way you frame your numbers and position them is the way the narrative is. Going to be received. This is why I talk about narrative design and narrative control. When it comes to telling a story with numbers, you have to get them right.
You have to position 'em the right way. You have to understand the frame and make sure you're focusing the attention in the right way. You don't do that early stage cuz you just don't have enough numbers. It's too early. Now what's the other thing? Relationships. When we're talking about relationships at later stage, these oftentimes are gonna be coming towards you because investors in the later stages know about you.
They're tracking you. They've seen your announcements for your pre-seed. They've seen the announcements for your seed, they've seen the announcements for your c A. Now, your job is to make sure that you maintain the position of power and force them to do work to get into you. Because yes, you want to build the relationship, but it can't come from a place of need or, oh my God, I'm so excited that this person reached out to me.
Don't be that person.
Instead, "Hey, great to hear from you. We're not fundraising right now. Happy to talk and get to know you and hear more about how you and your firm operates."
Very different than "Oh my God. It'd be so great to talk to you. I'd love to share about what we're building here."
How you position yourself matters in these later stages, because these are people who are looking for returns. They're not looking for just the giant future dream.
Now, that doesn't mean that you aren't still selling, that you're just selling a different version of the micro future and the macro future because you're a little bit closer to the macro future. That's what's so exciting.
So when you are fundraising, know where you're at. When I work with founders, we have to approach them differently. Early stage founders, our approach is one approach. Later stage founders our approach is different. You need to understand the differences in those investor psychology profiles.
Once you nail that, then you run a clean process and you can raise whatever capital you want.
And if you need help, reach out to us because we would love to be able to work with you and help you get the capital you need. That's what we do. So think about where you're at, understand what you need to do, and then go out and execute with the right storytelling and the right relationship building and good things are going to happen.
For an even deeper dive check out this post. It's gonna really help you understand exactly what we talked about here.
A former trial lawyer and prosecutor in Dallas, TX, Robbie trains founders to become world-class storytellers and venture capital fundraisers.
In barely two years, he's helped founders raise $575,000,000 of venture capital