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Comment by skrebbel | Hacker News Reader

To me, someone who lives in what the author calls "the real world", $750k sounds like a humongous pile of cash. I have a hard time matching this with the word "seed".

How far do SV angels expect you to be before they'll put that kind of money on the table? Idea? Prototype? Users? Ramen profitable? Ramen profitable and 4x monthly growth? Weekly?

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It depends, and there are factors which can make the usual rules not apply. The right team / the right story / the right moment / the right competitive dynamic among investors / etc means you can raise on, essentially, nothing else. If you have to ask whether this will apply in your case, it will not.

Anecdotally, the bar for a seed round in software is a) the product exists, b) real people are using it happily every day, and c) you're collecting proof points that it is a nascent business. (As distinct from a hobby project.)

If forced to put a number on it, for B2B SaaS, you've got either an LOI or contract for an anchor enterprise customer paying $50k+ or you've got thousands a month in low-touch revenue and it is increasing rapidly. Note that thousands is not tens of thousands. It may have been a while ago.

There are also huge X factors here. Location is one. Ask Matt Wensing about the frustrations of having the White House Situation Room as a paying client and being told that that was insufficient grounds to fund them because the TAM of WHSRs was 1 and, as they already had it, the investor didn't see the growth story.

Thanks, just wanted to be sure. No seed investment before team+product+users/customers+real turnover. Turns out the valley isn't that different from the real world after all!

750k is a lot in the real world... then you move to the Bay Area and run into the cost of living issues: rent, transportation.

It's very hard to find housing under $2k a month per person -- so if you make $7k a month and have X left after it you're going to be surviving on 75-100k a month... but it's like getting paid $50k in Atlanta: small apartment, decent food but no savings or big Hawaii trips.

The rent in the Bay Area is a huge problem. If was starting out my 5th person would be a homeowner who would let me use their garage, and a few bedrooms in exchange for stock in the company, and maybe a little help around the house? We seem to be, as Americans, too concerned with the right living situation? I've lived in a garage and couldn't care less. My dates did though? But the ones who looked beyond the rust stuck around for the finished product.

750k seems like a lot to me as well, however I have done startups that are very lean and all the investors are people that are working on the product.

35-70k of my own money was more than sufficient. The problem is once you're live, trying to get enough income while growing the company and having other jobs so you can fund your own needs makes it very difficult (have failed 7 out of 7, just to varying degrees, 3 made multiples of money back but died off, 4 went down in a flaming pile of dung).

I've done all but one of my startups in the midwest though (one in SF, SF failed out of the gate).

I don't like the money game, so I'll probably never have a startup take off, but trading away too much seems like it's not worth it. I don't do startups to get rich, I do them so I have clients/customers to answer to instead of asshole bosses.

My most successful startup was the one I regret (first I ever did alone 100% on my own dime). I should have gone after money 9-12 months in once I had a stable (although needing lots of work) product and 13 clients.

> My most successful startup was the one I regret (first I ever did alone 100% on my own dime). I should have gone after money 9-12 months in once I had a stable (although needing lots of work) product and 13 clients.

Why do you regret not doing this? I'm currently funding 100% my idea which has a few customers and I'm wondering if it will be better to raise funding once I can get more customers or to just keep going as is.

Raise funds. I was just being a control freak. I also had another project going at the same time which made me significantly more money, so my time became more limited.

If you have a few customers, make them super happy. Let them know you're going to be looking for investors so using them to help sell your business would help both you and them.

I had the opportunity, I just let it go. Good luck!

I imagine this varies on a case by case basis. Since this is often not publicly disclosed, its difficult to know exactly. In my personal experience at a few firms, the seed money came with an MVP that had proven an ability to get users and provide value.

Your next question is how many users, I imagine. This varies by the product/service. Working B2B? You don't need thousands. Doing something consumer facing or social? You need a lot, and a hook. Or something no one else has done that catches someone's attention that has a lot of money.

It boils down to risk tolerance. If Elon Musk were to say "I'm thinking of doing something new, just not sure what yet", someone will throw $7.5M at him. On the other hand, if you're not a big name with an established track record then showing up with just an idea isn't going to get you very far. The more you can demonstrate to reduce risk, the more likely you'll be in successfully raising funds.

Since you brought up Elon Musk, the "seed" funding for SpaceX was $100M of his own money. A different industry for sure, but I think it proves that "seed" funding can't really be defined by the amount but the intent.

Very true. I wasn't addressing what is defined as a seed, but his second point asking "How far do SV angels expect you to be before they'll put that kind of money on the table?"

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