Read this article and felt it was very helpful clarifying when startups should pursue funds and what each round means to you. The end is gold in my opinion where they breakout where recent startups converted to these rounds.
As someone who advises many startups, I can’t stress the importance of this enough and the need to realize – sometimes you just have to work very hard first and then get funds!
A highlight of my favorite section is below:
Delicious – Joshua Schachter had built Delicious working nights and weekends, launched it, got traction, and needed $1mm to leave his day job, start a company, hire some people, and scale the product.
Tumblr – David Karp and Marco Arment built Tumblr while doing consulting to others. Tumblr took off and they needed to stop doing consulting work so the two of them could focus 100% of their time on Tumblr. Spark and USV each invested $300k to help them do that.
Etsy – Rob, Haim, and Chris built Etsy themselves, launched it, and were scaling the business. They had raised a little money from two local entrepreneurs but they needed more to keep Etsy growing. We participated in a $600k seed round to help them do that.