Bolt Picks | What You Need to Know About Seed Rounds

A seed round is an entrepreneur's first formal encounter with venture capital, marking a new phase in the startup journey. As an early-stage investment firm, we meet founders at widely varying levels of experience — some are serial entrepreneurs, while others are first-timers with limited exposure to how fundraising actually works (especially among young founders building in AI). Recently, we came across a seed-round guide compiled by Lenny's Newsletter, one of Silicon Valley's most respected voices in tech and VC. While the companies, tools, and specific details referenced are all Silicon Valley-centric, and the author himself emphasizes that every company must decide based on its own circumstances, the underlying mechanics and principles of seed fundraising analyzed in the piece offer useful lessons for founders everywhere. Below is our translation of the core content; click "Read More" for the original English.

I. Should My Company Raise VC Funding?

A seed round is the first formal institutional round of venture financing, typically raising $1 million to $4 million from various investors. Smaller rounds are sometimes called "pre-seed" or angel rounds; larger ones occasionally get labeled "mango seed" rounds — but all fall under the seed umbrella.

You should consider a seed round if you're confident about the following:

1. Scale: You and your co-founders want to build a large company — public or private — with the goal of maximizing growth.
2. Dilution/control: You're comfortable selling roughly 10% to 20% of the company to investors.
3. Capital: Raising external capital will provide tangible advantages over bootstrapping — for example, developing products faster, outpacing competitors, etc.

If your answer to any of the above is no, a seed round may not be right for you, and that's perfectly fine. Not raising has its advantages: less dilution, more control, and fewer external distractions.

Delaying a seed round can also be beneficial, provided you can handle the challenges that come with it. Jason Fried of 37signals advises: "Raising money too early teaches you how to spend, not earn. When cash is flush, your mindset shifts toward being encouraged to spend and raise more, spawning things that don't help build a sustainable business long-term. Building a self-sufficient business requires practicing the skill of making money — which takes time to develop, like learning a musical instrument. The earlier you start, the better. Requiring yourself to earn more than you spend from day one is a critical skill, especially when it's your own money."

Remember: a healthy company focuses on building the business, not on venture capital. This helps both the business and any future fundraising. Notion founder Ivan Zhao put it this way: "You can allocate your time between selling/networking and building a great product. For Notion, I believed that if we truly built something remarkable, the connections would follow and investors would nod. So we focused most of our energy on the latter."

II. What Do I Need to Prove to Investors Before Fundraising?

Before any round, you need to give investors something to evaluate. They need "proof" that you can build something significant and enduring. There's no universal standard for what this proof looks like — every investor has their own method for finding and selecting deals. Some founders have a working product with paying customers before fundraising; others may only have a deck and an idea.

That said, you should aim to complete the following before raising:

1. Proof of full commitment: You've quit your previous job and are fully dedicated to the venture. Don't expect funding if you haven't gone all-in yourself.
2. Proof of early market validation: You've developed some customer relationships, done thorough research on what you want to build and the problem you're solving, and have genuine conviction about the market opportunity. Tomer London of Gusto recommends: "Talking to paying customers means deeply understanding their pain points and delivering your solution in the most practical way possible. You need at least 40% of them raving about your product and asking when they can use it. If you haven't hit that bar, remember — people's compliments are often just politeness."
3. Proof of insight: You've articulated your startup/product vision. Ideally, you have a simple product with some paying users. If not, you should at minimum have written content or a deck describing what you plan to build.

These three points also test your own conviction. If you're genuinely confident in the opportunity, your ability to persuade others to invest increases dramatically.

III. How Much Should I Raise?

A simple formula: 24 to 36 months of runway, with a 25% buffer.

1. Why 24 to 36 months? Generally, this timeframe is based on how long it takes to find product-market fit or survive until a Series A. According to Carta data, the average time from seed to Series A is 23 months.
2. You'll also want wiggle room — reserve roughly 25% as contingency, because unexpected things always happen.

Currently, most seed rounds fall between $2 million and $4 million. Some companies need far less or far more, requiring careful judgment. If you're targeting $2 million to $3 million, it's better to publicly state you're raising $2 million rather than $3 million — being oversubscribed beats missing your target.

Fundraising has two sides. Generally, raising too little may constrain growth, but raising too much isn't necessarily better either. Excess capital, especially early on, reduces urgency and innovation, and leads to unnecessarily high headcount and burn.

Building a product that customers love and will pay for, with profitability as Plan B, maximizes both your company's survival odds and your chances of raising the next round. Plaid founder Zach Perret said: "First, build a great business. If you can find a large market with unique customer insights, fundraising becomes easy. So at the end of the day, product and business matter most — nail that first."

IV. What Should I Know About Seed Round Size and Composition?

Most rounds include at least one large check, plus several angel investors and smaller funds. The large check is typically called the "lead," while smaller checks give strategic investors a seat at the table. Their value lies in providing "market signal" (think Elad Gil, who backed Harvey, HeyGen, Pika, and other notable companies). Other investors demonstrate value through post-investment services like growth, distribution, and recruiting.

There's no universally "correct" standard for seed round size and composition. You can raise through a single seed fund, a group of angels, a multi-stage VC firm, or anything in between.

Beyond the numbers, Figma's Dylan Field advises: "Treat this as the beginning of a very long-term relationship, not a transaction. Look for people you enjoy spending time with and want to learn from for years to come."

Seed-stage capital comes from three main investor types: angels, seed funds, and multi-stage VC firms.

• Angels typically move fast and often have highly relevant startup experience. However, most can only write small checks — typically $10,000 to $250,000. While they usually can't dedicate as much time as professional investors, they may offer the highest value per dollar invested. Well-known angels also bring significant brand premium, providing crucial "investor validation" in a company's earliest days.
• Seed funds can deploy more capital than angels, typically $1 million to $3 million. They offer stage-specific expertise and usually provide substantial hands-on support. Many seed funds also run valuable founder communities for peer resources and connections. Compared to multi-stage firms, however, seed funds have relatively limited resources to deploy and cannot provide follow-on capital as companies grow.
• Multi-stage VC firms can write larger checks — from $1 million to over $5 million — but are structurally designed to allocate most capital to growth funds, with early-stage representing a smaller slice. These firms typically have deep resource pools to support expansion. The flip side: if they don't participate in your future rounds, it's a negative signal for the company's prospects.

V. How Can I Maximize My Chances of Successfully Raising?

To maximize success, founders should prepare meticulously to increase their optionality. The key to seed fundraising is triggering an emotional response in potential investors — making them feel they'd miss out by not investing. Here's how:

1. Plan your fundraise

Spending time planning can double your odds of success. Block out 2-3 weeks on your calendar for fundraising. Ideally, you want to meet as many investors as possible in the shortest timeframe — this compression creates scarcity and effectively pushes investors toward positive decisions.

A related question: should you maintain relationships with investors when you're not fundraising? Building relationships during non-transactional periods is fine, but be careful not to let these evolve into situations where investors might expect to lead your next round.

The principle here is that you must own and design the entire fundraising process. So if investors approach you about early term sheets, you can express gratitude but confidently tell them when you plan to fundraise. This won't dampen their interest. In fact, even if some well-connected investors offer early term sheets and quotes, the best choice is still to gather more information during your formal process and weigh all options before deciding.

2. Do your homework before meeting investors

Before pitching, compile your target list and deeply research everyone on it. Have they invested in similar companies? What's their check size and investment philosophy? Do they lead? What do other founders say about them?

3. Prepare your materials carefully

You need to use a deck or presentation to prove to investors that you're solving a real problem in a large enough market, and that you're the right person to solve it. The quality of this presentation matters enormously — the better crafted, the more persuasive, and the higher your odds of securing funding. Prepare all materials before fundraising, then tailor for each potential investor. Note that well-crafted doesn't mean visually stunning — substance matters more than aesthetics.

Always remember: be honest, not just optimistically so. As Figma's Dylan said: "Be honest about what you know and what you don't."

4. Get warm, high-impact introductions

The person introducing you to a potential investor matters more than you think. Before asking for introductions, spend time identifying the most influential introducer for each investor. High-impact introducers include:

• Successful founders in the investor's portfolio (actually influential regardless of whether they invested)
• Other successful founders or influential KOLs
• Investors already committed to your round (angel, seed, or multi-stage)

Generally, the closer your relationship, the stronger the recommendation. There are also lower-impact introductions: investors who passed, lawyers, or other service providers for your company.

Runway's Siqi Chen put it this way: "The most important thing is ensuring your introduction comes from someone genuinely excited about you and what you're building. When investors know someone they respect is staking their social capital on you, you stand out."

If you can't find someone to make a warm introduction, write a high-quality cold email. While these convert worse than warm intros, there's no harm in sending one.

5. Practice and prepare your pitch

Your performance in meetings matters more than your deck materials. Showing up as your authentic, relaxed, confident self is key. But pitching isn't something you can improvise — it requires practice and preparation. Here's what to do before talking to investors:

• Write a speaking script. Even if you don't share it, writing one helps clarify your thinking and communication.
• Practice extensively before facing real investors. Start with less important ones to iterate.
• Investors often weigh your answers to their questions heavily, so respond calmly and concisely. If you don't know something, simply say: "I don't know, but I'll find out for you." You can also prepare a list of common questions — it will help.
• Acknowledge competitors objectively, including their strengths. Avoid disparaging competitors or discussing them excessively in your pitch. What matters is stating your own advantages and vision.

6. Build social proof incrementally

In a seed round, you don't need to wait for a lead before accepting capital. Start collecting small angel checks while having conversations with larger funds — this gets you capital while building social proof for bigger investors.

7. Follow up with investors carefully; never chase or privately contact them without sufficient leverage

Interested investors will typically drive the process forward themselves. If you do need to follow up by email, be measured — don't pursue them with an air of desperation. In subsequent communications, try to add positive updates about your project each time: revenue growth, new hires, feature launches, or new angel investments secured.

Moreover, trying to pressure investors into investing doesn't work. Savvy investors interpret such pressure as a sign of weakness.

8. For larger checks, never reveal who you're talking to

Mystery is often more compelling than truth. Never disclose the actual names of firms offering you terms — describe them abstractly, but always remain honest.

9. You only have a term sheet when you actually have a term sheet

Verbal commitments are not term sheets. Remember: until you receive an actual term sheet, you don't have an investor's real commitment. This applies to every round.

10. The round isn't closed until money is in the bank

While rare at the seed stage, until funds actually hit your account, the fundraise isn't over. Set reasonable but rapid funding dates, and get everyone working toward them. This also applies to every round.

VI. How Do I Negotiate Terms in a Seed Round?

In a seed round, the terms that truly matter are post-money valuation and whether to form a board. Post-money valuation is the total company value including the capital raised. You can use third-party resources, other founders, and advisors to help determine a reasonable valuation range. When discussing post-money valuation, what investors primarily care about is ownership — the percentage of the company they'll own — which is slightly different from price.

VII. Notes on Dilution

As a founder, you don't want cap table constraints that limit your operational flexibility. Fundraising changes your ownership structure, but it also brings capital and partners to help push the company toward its next milestone.

Instacart founder Max Mullen said: "My most important advice for founders is to optimize your financing rounds to get the most helpful investors involved as early as possible, and worry less about adjusting price and other terms to make that happen."

Raising a large amount with minimal dilution is extremely rare unless you're in a very strong, powerful position in your fundraise — say, with a stack of term sheets. But this is genuinely uncommon.

VIII. How Do I Know If My Fundraise Is Going Well?

In a successful fundraise, investors who intend to invest will actively push things forward — you'll feel it. They move quickly, introduce you to other team members, and are generally transparent throughout the process. These investors will tell you they want the deal to happen and start talking specific numbers. Things move forward clearly and rapidly.

Applied Intuition founder Qasar Younis said: "When things follow normal logic, that's good. When things are confusing, that's bad."

When this momentum is absent, things typically become slow and confusing — no clear next steps after meetings, no discussion of specifics. If this happens, don't be afraid to ask directly: "Are you interested in investing?" Getting a quick no beats wasting time on an investor who isn't going to act.

But sometimes, it takes effort to move things forward with investors. Pitching yourself is okay. Sharing substantive progress with other potential investors is okay. For example, you might say: "We have our third meeting with a top-tier firm tomorrow" — but don't name them. However, don't exaggerate. Don't claim to have a term sheet you don't have, or mention names of investors who haven't actually committed. Beyond being unethical and insincere, the circle is small — lying and exaggeration will lead others who know the truth to drop your project faster.

IX. How Do I Choose the Right Investors?

Good investors are those who can best help push your company forward. Many founders agree: entrepreneurs should do their own due diligence before taking investors' money.

Ramp founder Eric Glyman's advice: "Try talking to other founders and asking which investor was most helpful to their business. Founders will usually tell you the truth straight up."

Talking to other founders helps you judge whether a potential investor brings value or friction, and whether they're trustworthy. Front founder Mathilde Collin said: "Trust is key. You trust them, they trust you."

In a seed round, you're not just getting capital from these investors — you're inviting them to join your company for the long term. Eric suggests trying to work with investors before accepting their investment: "Look at your business from a potential future investor's perspective, let them experience what it's like to work with you on real business problems." This approach may seem indirect, but its advantage is giving you an authentic feel for what working with that investor is like.

X. I've Closed My Seed Round — Should I Issue a Press Release?

For most early-stage companies, completing a seed round is a significant milestone. Announcing it can help create positive impressions and credibility with potential customers and recruits, boost brand value, and lay groundwork for future fundraising.

But the potential downside is that these actions may attract competitors' attention. Applied Intuition's Qasar said: "The downside of announcing immediately is simple — it stimulates VCs to invest in similar projects, and motivates your competitors to rush their own fundraising."

The Browser Company founder Josh Miller suggests founders ask themselves: "What are the three biggest challenges facing the company right now? If announcing the fundraise and telling that story externally helps solve one of them, do it. If not, a press release is a distraction."

Linear Bolt

Bolt is Linear Capital's dedicated investment initiative for early-stage, global-market-facing AI applications. It upholds Linear's investment philosophy and approach, focusing on technology-driven transformation, and aims to help founders find the shortest path to their goals — whether in speed of action or investment mechanics. Bolt's commitment is to be lighter, faster, and more flexible. In the first half of 2024, Bolt invested in seven AI application projects including Final Round, Xin Guang, Cathoven, Xbuddy, and Midreal.