How to run a seed raise without getting played

Most fundraising advice is written by people who have only ever been on one side of the table. I have been on both. Before I invested, I ran corporate development and M&A at Fortune 500 scale, including a deal valued at around 26 billion dollars, where every number was modeled, pressure-tested, and defended. Now I write the checks at the other end of the market, early-stage healthcare, through Sonnerie VC.

A seed raise is a process, not an event. The founders who do well are not the ones with the best deck. They are the ones who run a tight process: a clear reason to raise, a real list, a sequence, and enough momentum that investors feel they might miss it. This page is how to do that, and how to know when you should not be raising at all.

One promise up front. I will tell you the honest answer, even when it is "you are not ready." A premature raise is not a small mistake. You burn your best introductions, you anchor a price you cannot grow into, and you make the next round harder. Timing is most of the game.

Are you actually ready to raise?

Raising money is not a milestone. It is a tool you use to buy a specific outcome you have already decided you need. The question is never "can I raise." Plenty of weak companies raise. The question is whether raising now is the highest-value thing you can do with the next three months of your life, because that is roughly what a real process costs you.

You are probably ready if you can say yes to most of these. You have something a stranger can use, not just a deck describing it. You have early evidence that the thing works: users who came back, a pilot that converted, a waitlist that pulls, a letter of intent, a technical result that de-risks the hard part. You have a team that is unreasonably suited to this specific problem, and you can say in one line why. You can state, in one sentence, the specific milestone the money buys and why that milestone makes the next round obvious. And you, the founder, can explain the business cold, without slides, in a way that survives a skeptical question.

Here are the honest signs you are not ready, the ones I see most often. You are raising because your runway is ending, not because you have hit a moment of proof. You cannot name the milestone the round buys, so the amount is really "as much as I can get." Your evidence is all narrative and no behavior: lots of meetings, lots of interest, nobody actually using or paying. You are raising to figure out what to build, which is a research grant disguised as a seed round, and almost nobody funds it. Or the brutal one: you would not invest your own money at the price you are about to ask for. If two or more of those are true, the most valuable move is usually to wait eight to twelve weeks, get one piece of undeniable proof, and raise from strength. Money raised from weakness is the most expensive money there is.

This is sector-dependent. A deep-tech or healthcare company with a hard technical risk can raise on a credible team and a de-risking result before it has revenue, because the risk that matters is technical, not commercial. A consumer or SaaS company usually needs usage. Calibrate the bar to where the real risk in your business actually sits.

How much to raise, and the milestone it buys

Start from the milestone, not the amount. A seed round should buy you to a point where the next round is clearly fundable, plus a margin for the fact that everything takes longer than you think. Work backwards: what has to be true for a Series A investor to lean in, what will it cost per month to get there, and how many months does that take. Then add buffer.

The default I use is about 18 months of runway. The logic: it realistically takes nine to twelve months to hit a meaningful milestone, and three to six months to actually close the next round once you start. Eighteen months gives you room to hit proof and raise from a position of strength rather than running the next process with a gun to your head. Twelve months is too tight, you are raising again before the story is built. Twenty-four-plus months sounds safe but means more dilution now than you need, and it can signal you are not sure what the money is for. Tighten or loosen this for your burn volatility and how capital-intensive the milestone is.

So the formula is roughly: planned monthly burn at the team size you need, times about 18, plus a buffer of 15 to 25 percent for slippage. Then sanity-check the dilution. At seed, founders typically sell somewhere in the range of 10 to 20 percent in a round, with many rounds clustering around 15 to 20. If the amount you "need" implies selling 35 percent, the problem is usually that you are trying to buy too many milestones with one round, or the valuation you can support is too low for the cash you want. Cut scope, not conviction. Raise to one clear milestone, not to a comfortable five-year plan.

Two caveats. These dilution ranges are US-centric and vary by sector, stage, and geography; European and Polish rounds can run leaner on dollar amount and sometimes lighter on dilution, and hot sectors distort everything. And "how much can I raise" is the wrong anchor. Raise the amount that buys the milestone with buffer, and no more. Extra zeros today are extra dilution forever.

Pre-money vs post-money, and how raise size and cap interact

This is where new founders lose the most ownership, usually to a word. Pre-money valuation is what investors agree the company is worth before the new money goes in. Post-money is pre-money plus the money raised. The investor's ownership is calculated on post-money, always. So post-money equals pre-money plus amount raised, and the new investor owns amount raised divided by post-money.

Watch what happens when a number is quoted as pre versus post. If you raise 2 million on a 8 million pre-money, post-money is 10 million and you sell 20 percent. If that same 8 million is quoted post-money, then pre-money is only 6 million, and on a 2 million raise the investor owns 25 percent. Same headline "8," five points of your company different. Always confirm, in writing, whether a number is pre or post before you celebrate it.

On a SAFE or convertible note, the "valuation" is a cap, and most modern SAFEs (the YC post-money SAFE) are post-money by default, which means the cap already includes the SAFE money itself. If a SAFE has both a valuation cap and a discount, it converts at whichever gives the investor the lower price per share, that is, the lower of the cap price and the discount price. Two more details worth knowing: with the post-money SAFE, the investor's pro-rata rights usually sit in a separate side letter rather than in the SAFE itself, and an MFN ("most favored nation") clause lets an early investor adopt the better terms of any SAFE you sign later. The trap that bites founders: SAFEs do not show their dilution until they convert, and if you stack several SAFEs at different caps, the total can convert into far more of your company than you pictured. Before you sign a single SAFE, build the post-money cap table and add up what every instrument converts into at the priced round, including the option pool the next investor will demand (often 10 to 15 percent, and often carved out of the pre-money, which dilutes you, not them). Model it once and the abstractions become concrete.

If you want to see this in numbers on your own cap, run it through the SAFE and dilution calculator. It shows exactly how a given cap and raise size translate into ownership after conversion.

Illustrative defaults, not advice. The numbers and ranges here are examples, not rules, and a SAFE is a legal instrument: have a qualified startup lawyer review any SAFE or note before you sign.

Build and sequence the investor list (without warm intros)

A list is not a pile of names. It is a sequenced, researched set of investors who plausibly invest in your stage, your sector, and your check size, ordered so that you learn and build momentum as you go. Most founders fail here in two ways: the list is too short and too famous, or it is a random spray with no thesis fit. Both waste your best asset, which is the freshness of a first conversation.

Build it in tiers. Tier A: the dream investors, the ones whose name changes the round, maybe five to ten. Tier B: strong, realistic fits who lead at your stage, twenty to forty. Tier C: smaller funds, angels, and operators who fill the round and add specific value, as many as are genuinely relevant. For every name, write one line on why they fit: a thesis, a portfolio company, a public take. If you cannot write that line, they are not on the list, they are noise.

Now sequence it. Do not open with your Tier A. Take a few low-stakes Tier C and B meetings first to sharpen the story and surface the hard questions, then go to your top targets when your pitch is tight and you can speak to real interest. The order is a learning curve, not a popularity contest.

On doing this without warm intros, which is most non-traditional founders: you do not need a rolodex, you need a reason for the person to reply. A warm intro is a shortcut around credibility. You replace it with the thing the intro was supposed to prove, that you are worth the meeting. A specific, short cold email that shows you understand their thesis, states your traction in one line, and asks for one clear thing outperforms a vague warm intro every time. Find the partner who has publicly written about your space and reference the actual thing they wrote. Use your customers, your design partners, and other founders in their portfolio as the real warm path, founders refer better than acquaintances do. I built an entire career in American finance without a single warm intro, and the discipline it forced became the edge. The full version is here: building without warm intros.

Run a tight process that creates real momentum

Momentum is not luck. It is manufactured by running a real process instead of a leaky one. Investors are pattern-matchers, and the pattern they fear most is missing something other smart people want. Your job is to make the round feel alive without lying about a single fact.

Go in waves, not one at a time. Open your outreach to a batch of well-matched investors in the same week so that first meetings cluster, not stretch across two months. A round that dribbles out over a quarter reads as stale by the end; the same conversations compressed into three to four weeks read as a process people are racing to get into. Concentration is the whole trick.

Create a soft deadline, honestly. You do not invent a fake term sheet. You set a real target date for the raise, tell investors you are aiming to wrap the round by then, and let the calendar do the work. When one credible investor leans in, that is your lever: a real lead resets everyone else's urgency, because now the risk of missing is concrete. Use it. "We have strong interest and are aiming to close by [date]" is true, specific, and moves people.

Track everything. A simple pipeline, every investor, stage, next step, and date, run like a sales process, because it is one. Always know your "next best alternative" so you negotiate from information, not hope. And protect the asset: do not let your top targets be the ones who watch the round sit open for three months. Sequence so your strongest conversations happen when there is heat.

The narrative and the data room

A seed pitch is one clear story plus the evidence to back it. The story has a shape: here is a real, specific problem; here is why now; here is our approach and why it is hard to copy; here is the proof it is working; here is the team that is unreasonably suited to this; here is the milestone this round buys and what it unlocks. If a smart stranger cannot repeat your story back to you after one read, it is not tight enough yet. Simplify until they can.

Lead with the thing that is most true and most surprising about your business, not with the market size. "The market is huge" is the weakest slide in venture, because everyone says it and it proves nothing. Open with the proof: the retention curve, the pilot that converted, the technical result, the customer who pulled the product out of your hands. Let the evidence carry the narrative.

The data room is your credibility, organized. At seed it is light but real: the deck, a short financial model with your assumptions visible, current metrics, the cap table (clean and current), incorporation and key contracts, and founder bios. The point is not volume. It is that nothing important is hidden and every number ties out. The fastest way to kill a round is a data room where the numbers in the deck do not match the numbers in the model. Investors do not just price your company in diligence, they price your rigor, and sloppiness reprices the deal downward.

Reading a term sheet without getting played

When you get to a term sheet, read it like a contract, not a trophy. The headline valuation is the least important part. The terms decide who controls the company and who gets paid first if things go sideways. The ones that matter most at seed: the liquidation preference (1x non-participating is the founder-friendly standard, anything above 1x or "participating" is a flag), anti-dilution (broad-based weighted average is standard, full ratchet is a red flag), the option pool shuffle (a pool carved from the pre-money dilutes you, not the investor), board control (do not hand investors a board majority at seed), founder vesting (four years with a one-year cliff is healthy), the no-shop (keep it to about 30 days), and pro-rata and protective provisions (standard, but read the list). None of this is legal advice. Have a real startup lawyer read any term sheet before you sign, because the wording is where the money hides.

A "yes" with bad terms can be worse than a clean no. Know which terms are standard before you are emotional about an offer. For the full, printable walkthrough of all ten terms, what is standard and what is a flag, see the term sheet decoder.

Why seed rounds stall

Most rounds do not die from a dramatic no. They die slowly, from a few avoidable mistakes that bleed momentum. Here are the ones I see most, and the fix for each.

The one-line version: rounds rarely die from a single dramatic no. They bleed out from a leaky process. Run it tight, sequence it, tie the numbers out, and act on the pattern in your feedback.

What to do after a no

First, decode the no, because "no" carries information and most founders throw it away. There are three kinds. "Not now," which is really "show me one more proof point," and is an invitation to come back. "Not me," which means wrong stage, sector, or thesis fit, and is a list problem, not a you problem. And "not this," which means something in the business or the pitch is not landing. The first two are cheap. The third is the one to chase down.

So ask. A short, gracious reply to a pass: "Understood, thank you for the time. If you are open to it, what would have to be true for this to be a yes for you?" A surprising number of investors will tell you the real reason, and the real reason is gold. When you hear the same objection three times, that is not noise. That is the market telling you exactly what to fix before the next batch of meetings.

Then keep your composure and your sequence. A no from one investor is one data point, not a verdict; venture is a game of a few yeses against many nos, and the founders who win are the ones who stay calm, fix the pattern, and keep the process moving. If the whole market is telling you the same thing, that is not a rejection to push through, it is feedback to act on. Sometimes the honest answer is to pause, go build the missing proof, and raise from strength in two months instead of forcing a weak round now. That is not failure. That is judgment, and it is the most valuable thing you can bring to your own raise.

One readiness check before you re-enter: if you are not sure whether the problem is the pitch or the timing, score the raise honestly. The pitch readiness scorecard will usually tell you which one it is.

Common questions

How much should I raise in a seed round?

Raise the amount that buys you to a clear milestone plus a buffer, not the maximum you can get. A common default is about 18 months of runway: roughly nine to twelve months to hit a meaningful milestone and three to six months to close the next round, so you raise from strength rather than under pressure. Calculate it as planned monthly burn times about 18, plus 15 to 25 percent buffer, then check the dilution. Seed founders typically sell about 10 to 20 percent of the company in a round. If your target implies selling much more than that, you are usually trying to buy too many milestones at once. These ranges are US-centric and vary by sector, stage, and geography.

What is the difference between pre-money and post-money valuation?

Pre-money is what investors agree the company is worth before the new investment goes in. Post-money is pre-money plus the amount raised. The investor's ownership is always calculated on post-money: their stake equals the amount they invest divided by the post-money valuation. The practical trap is that the same headline number means very different dilution depending on which one is meant. Raising 2 million at 8 million pre-money is 20 percent of the company; the same 2 million at 8 million post-money is 25 percent. Always confirm in writing whether a quoted valuation is pre or post before you agree to it.

How do SAFEs and valuation caps affect how much of my company I give away?

A SAFE does not set a price today; it sets a valuation cap at which it converts into equity in your next priced round. Most modern SAFEs (the YC post-money SAFE) are post-money, meaning the cap already includes the SAFE money. If a SAFE has both a cap and a discount, it converts at whichever gives the investor the lower price per share, that is, the lower of the cap price and the discount price. The risk is that SAFEs hide their dilution until they convert, and stacking several SAFEs at different caps can convert into far more of your company than you expected, especially once the next investor's option pool is added. Before signing any SAFE, build the post-money cap table and add up what every instrument converts into. A SAFE is a legal instrument, so have a real startup lawyer review the documents before you sign.

How do I reach investors if I do not have any warm introductions?

You do not need a rolodex; you need to give the investor a reason to reply. A warm introduction is a shortcut around proving you are worth the meeting, so replace it with the proof itself. Send a short, specific cold email that shows you understand the investor's thesis, states your traction in one line, and asks for one clear thing. The strongest real warm path is usually your own customers, design partners, and founders already in that investor's portfolio, because founders refer better than acquaintances do. A precise cold approach that demonstrates fit reliably outperforms a vague warm intro.

A seed investor passed. What should I do after a no?

Decode the no, because it carries information most founders discard. "Not now" usually means show me one more proof point. "Not me" means wrong stage, sector, or thesis fit, which is a list problem, not a verdict on you. "Not this" means something in the business or pitch is not landing, and that is the one to chase. Reply graciously and ask what would have to be true for it to be a yes; many investors will tell you the real reason. When you hear the same objection three times, treat it as instructions. A single no is one data point in a game won with a few yeses against many nos.

What term-sheet terms should a first-time founder watch out for?

The headline valuation matters less than the control and payout terms. At seed, the founder-friendly standards are: 1x non-participating liquidation preference, broad-based weighted-average anti-dilution, a board that does not give investors majority control, and four-year founder vesting with a one-year cliff. The flags to push back on are anything above 1x or participating preferences, full-ratchet anti-dilution, an option pool carved entirely from the pre-money, a long no-shop beyond about thirty days, and an overlong list of protective provisions. None of this is legal advice. Have a qualified startup lawyer review any term sheet before you sign. The full walkthrough is in the term sheet decoder.

Educational, not advice. This playbook is general education from one practitioner's experience, not legal, financial, tax, or investment advice, and not a guarantee of any fundraising outcome. Markets, terms, and norms vary by sector, stage, and geography, and the numbers and ranges here are illustrative defaults, not rules. Fundraising involves real risk and most startups do not raise successfully. For any term sheet, SAFE, note, or other financing document, retain a qualified startup lawyer before you sign. For decisions specific to your company, get professional advice from someone who knows your situation.

Tomasz Felpel is an investor, founder, and advisor based in New York. He founded Sonnerie VC, an early-stage healthcare venture firm, and Value Alpha, a private-markets valuation platform. Previously he led corporate development and M&A at Fortune 500 scale, including a transaction valued at around 26 billion dollars. Columbia Business School EMBA. He advises founders, with a focus on those building without inherited networks. Read the full story.