Navigating from Seed to Series A: Insights from Founders and Investors (Harlem Capital)

Summary

• Harlem Capital portfolio companies raised a median of $8.5M at a median valuation of $58M, representing average dilution of 22%.p.6
• The median time between seed and Series A rounds for Harlem Capital portfolio companies is 23.8 months, slightly above the industry median of 22.3 months.p.6
• In the US, $38.8B was invested across 1,804 Series A rounds in 2022.p.8
• Average Series A round size was $15M with a post-money valuation of $65M.p.8
• In 2022, Black founders raised $131M in Series A funding across 18 rounds, only 0.34% of all Series A funding.p.9
• In 2022, Latino founders raised $441M in Series A funding across 31 rounds, only 1.1% of all Series A funding.p.9
• In 2022, teams with at least 1 female founder raised $2.5B in Series A funding across 183 rounds, 6.5% of all Series A funding.p.9

Key insights

1. Funding fell steeply from January ($7B raised across 169 rounds) to December ($1.8B raised across 110 rounds) in 2022.p.8
2. The average round size for Black founders was only $7.3M, almost 50% less than the industry average of $15M.p.9
3. Founders should plan and market their Series A 9-12 months before they run out of runway.p.4
4. Founders may speak to tens or hundreds of VCs before finding their Series A lead.p.3
5. One founder bought a Pitchbook membership for $15,000 to research which VCs had made consumer investments in the last 6-12 months.p.3
6. Effective Series A storytelling means conveying the values, history, people and journey that make a company an exciting investment.p.5