O The Pre-Seed and Seed investment refers to two out of five main types of so-called investment rounds. This last name is designated the main tool used by startups to accelerate their growth.
What are investment rounds?
In other words, it is a process in which entrepreneurs present their projects to potential investors in order to interest them in providing capital. Certainly with the condition and purpose of obtaining an equity stake in the business, participating in the company's future earnings.
In the meantime, the contributions are structured according to the maturity and risk level of the investments. In other words, the more initial is the company, the smaller is the round.
The focus of this guide is the two initial stages, since they arouse greater curiosity in the market due to their practical accessibility for both parties in the negotiation. However, make no mistake: to enter this segment you need to know it well. So read on for more insights.
Do you know the difference between Pre-Seed and Seed?
Pre-Seed Investment
The Pre-Seed investment takes into account startups in the traction phase that have a tested and validated MVP. Just to exemplify, the MVP is like a prototype of the startup's solution that can already be tested in commercial use. Typically investment amounts at this stage reach up to R $1 million and are made after the classic FFF (Family, Friend & Foul).
This is a round with a valuation, where it is possible to observe the involvement of angel investors. This is because, besides the possibility of offering financial resources to the venture, they also add smart money, value through their experiences and expertise.
Seed Investment
Seed investment is indicated for projects in the growth phase that need more capital. These are usually startups in the scale-up phase and in search of confirmation of their business model in practice, at the beginning of the expansion phase. Thus, the funds raised are applied mainly to product development as well as to the growth of the team.
To wit, in this investment round more research is commonly conducted on the target market and product fit - a concept known as "product-market fit".
It is therefore recommended that the entrepreneur be prepared to present the business projections and available opportunities to potential investors. Generally investment amounts at this stage usually range between R $ 1 million and R $ 5 million.
How to make a Pre-Seed and Seed Investment?
LGA Ventures accelerates the connection of investors with the best innovative startups and accompanies their growth focusing on financial return with the great differential of the possibility of assuming the role of angel investor in different startups at the same time.
Vantagens de investir com a LGA Ventures
- End of Stress: You invest and LGA Ventures takes care of the corporate and tax aspects. We organize the investment and negotiate with the founders.
- End of liabilities: Our contracts are entered into via a Convertible Loan in shares after 3 years, with an SCP (Silent Partnership) of LGA Ventures.
- Responsible and assertive management of your investment: We structure the relations between investors and governance, closely monitoring the startups with quarterly reports and performance indicators.
A LGA Ventures was born with more than 20 years of experience referring to its own network of co-investments in startups, added to consulting and auditing in the accounting sector as a result of the union between LAAS Latin American Angels Society and the GAAP Auditores & Consultoresin addition to the legal partnership with Baptista Luz, a pioneer in business development and innovation.
Instead of allowing you to invest in just one company, we bring a safer, more diversified and profitable proposition, multiplying the assets of your portfolio in up to 10 startups and promising chances to become a partner of an upcoming unicorn from a single investment.
