Startup growth phases from pre seed to expansion
| Stage | Typical raise | Typical valuation (Europe) | Common investors |
|---|---|---|---|
| Pre-seed | EUR 100k to 500k | EUR 1m to 4m | Angels, pre-seed funds, accelerators |
| Seed | EUR 500k to 3m | EUR 4m to 12m | Seed funds, angels, some VCs |
| Series A | EUR 3m to 15m | EUR 15m to 50m | VC funds |
| Series B | EUR 10m to 40m | EUR 50m to 150m | Growth VCs, existing investors |
| Series C+ | EUR 30m+ | EUR 150m+ | Growth equity, late-stage funds |
These figures vary widely by sector and geography. A capital-intensive deep tech company may raise more at pre-seed, while a lean software company may skip straight from a small seed round to Series A with limited capital raised in between.
Evolution of funding instruments across rounds
Very early rounds are often done using convertible instruments rather than priced equity, since agreeing a precise valuation is hard with little traction. From Series A onward, rounds are almost always priced equity rounds with a formal share price and a full set of investor rights.
- Pre-seed: SAFE (mainly non-UK/US-style deals), convertible loan note, UK advance subscription agreement, or straight equity
- Seed: convertible note or priced equity, increasingly priced as seed rounds mature
- Series A and beyond: priced equity with preferred shares and full investor protections
Cumulative ownership impact of successive raises
Each priced round typically dilutes existing shareholders by 15% to 25%, including any option pool top-up. A founder who owns 80% after incorporation and an initial pool might own roughly 55% to 60% after seed, 40% to 45% after Series A, and 25% to 35% after Series B, though the exact numbers depend on round size and pool changes.
These are illustrative ranges, not guarantees. Actual dilution depends on the specific round size, pre-money valuation, and pool top-up negotiated in each deal.
Funding round basics, answered
- Do all startups raise a seed round before Series A?
- Most do, but some skip stages or combine them, especially if they have strong early traction or come from a well-known accelerator or founder background.
- What is the difference between pre-money and post-money valuation?
- Pre-money valuation is the company's value before new investment is added; post-money is pre-money plus the new money raised.
- Why do later rounds use priced equity instead of convertible notes?
- By Series A, there is usually enough data (revenue, growth, market position) to negotiate a fair valuation directly, so parties do not need to defer that decision.
General information for founders, not legal or tax advice. Thresholds and rates change, so confirm the current position with an adviser in the relevant country before granting.