The fundraising landscape & the rounds — the big map
🎯 Goal: Grasp the three paths to raise money (bootstrapping, angel, VC) and the order of rounds; use a quick formula to compute how much % you must sell each raise, and decide WHEN to raise and when NOT to.
Raising money is not an achievement — it is a trade: you swap equity for cash to move faster. Three paths: bootstrapping (self-funding with savings/revenue — keep control but grow slowly), angel (early individuals putting in small amounts), and VC (venture funds putting in large amounts for equity and expecting fast growth). Capital comes in rounds: pre-seed → seed → Series A/B/C. You will leave able to compute % sold = investment ÷ post-money, and know to raise only with momentum and a clear plan for the money.
Lesson content
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Raising is a trade-off, not a trophy. You sell part of your future ownership for cash to accelerate today. Three paths: • Bootstrapping: fund the startup with your own money + revenue. Keep almost 100% equity & full control, but grow slowly and bear all cash risk. • Angel: experienced individuals put in small amounts very early, often with advice and connections. • VC (venture capital): large amounts for equity, expecting fast growth and a big exit (IPO or sale). Fast cash always has a price: dilution and pressure to grow to plan.
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Decision framework — climb one rung at a time. Each round is a rung: only climb once you have proven the one below. 1) Pre-seed: prove someone needs it (MVP + demand signal). 2) Seed: prove product–market fit (customers return and pay). 3) Series A: prove a repeatable sales channel (how much revenue per marketing dollar). 4) Series B/C: prove you can scale (new markets, new product lines). Three questions before raising: (a) Do I have traction yet? (b) Do I have a plan to multiply what works? (c) Is the valuation good enough that I won’t sell too much %?
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TOOL: Round map + the %-sold formula. Core formula: new investor % = investment ÷ post-money, where post-money = pre-money + investment. Figures below are illustrative for learning (not any real company’s numbers).
Round
What the money is for
Raise (illus.)
Pre-money
% sold ≈
Pre-seed
MVP, validate demand
1bn
4bn
1÷5 = 20%
Seed
Find PMF, core team, first customers
5bn
20bn
5÷25 = 20%
Series A
Standardize sales channels
30bn
120bn
30÷150 = 20%
Series B
Scale up, new markets
100bn
400bn
100÷500 = 20%
Note: each round typically sells ~15–25%. If valuation doesn’t rise between rounds, every raise shaves off more of your equity — so the goal is to raise pre-money via traction and sell less % for the same money.
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Case study — Coolmate (step by step, illustrative journey): 1) Early/bootstrapped: sell basic menswear online, prove customers return steadily. 2) Seed: early funds (Do Ventures, 500 Global often operate here) invest to grow the team and logistics. 3) Series A → B → C: each round multiplies something already working — more product lines, more channels, new markets. Active VN & regional funds: Do Ventures, 500 Global, VinVentures (early), Access Ventures, Vertex Ventures (larger). The common thread: they invest on real growth evidence. For contrast: MoMo, Tiki raised many large rounds to fund user growth — trading heavy dilution and pressure on the path to profit.
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Fundraising traps: • Raising on FOMO: "a rival just raised, so we must too" — without PMF. • Raising too early at a low valuation: selling lots of % for little cash → heavy dilution, no equity left for later. • Raising too much: sitting on cash you can’t deploy, burning it wrong, then chasing growth targets you can’t hit. • No plan for the money: good investors immediately ask "what does this multiply?". Content & templates are for LEARNING only, not financial/legal advice; real fundraising needs a lawyer and an accountant.
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Checklist before deciding to raise a round: ① Which rung am I on (pre-seed/seed/A/B)? ② Do I have traction evidence fitting that rung (returning customers, rising revenue)? ③ What will the money multiply — can I write 3 concrete lines? ④ Compute: for the amount needed and my expected pre-money, how much % must I sell? Acceptable? ⑤ Do I have enough cash runway to avoid raising from weakness? ⑥ Have a lawyer/accountant reviewed it?
Practice exercise
🔬 APPLIED EXERCISE: Pick a startup you know (or your own idea). (1) Use the "round map" to identify its rung and why. (2) Suppose you want to raise X at pre-money Y — compute post-money = Y + X and % to sell = X ÷ post-money. (3) Write 2 reasons it SHOULD raise now and 1 reason it may NOT be ready.
Worked template: FILLED EXAMPLE: An online food stall with 20 orders/day and unclear repeat rate → pre-seed/seed rung. To raise 1bn at a 4bn pre-money → post-money = 5bn → sell 1÷5 = 20%. SHOULD: needs money to open delivery channels + has steady orders. NOT yet: hasn’t proven repeat customers → bootstrap 2–3 more months to lift traction, then raise at a higher pre-money and sell less %.
Quick quiz
1. What is raising money fundamentally?
→ A trade: swap equity (future ownership) for cash to move faster
Raising is a trade of equity for cash to move faster, not a trophy.
2. How does bootstrapping mainly differ from raising VC money?
→ Bootstrapping keeps almost full ownership but grows slower; VC gives large money for equity
Bootstrapping keeps almost full control but grows slowly; VC gives large money for equity.
3. A startup raises 5bn at a 20bn pre-money. What % do new investors get?
Capital follows pre-seed → seed → Series A → B → C, each round larger.
5. The right time to raise a large round is usually when:
→ You have momentum and know exactly how the money multiplies what works
Raise when you have momentum and know the money multiplies what works, not out of FOMO.
6. Why try to raise pre-money (via traction) between rounds?
→ Because higher pre-money → the same money sells less % → lighter dilution
A higher pre-money (via traction) means the same money sells less % → lighter dilution.
Advanced
A deeper framework
At an advanced level, separate two opposing goals when raising: (a) raise enough cash to hit the next milestone, and (b) sell as little equity as possible. Balance them by asking: "what is the smallest amount that hits a milestone which clearly lifts the next round’s valuation?" — raise exactly that, no more.
Quick rule: if you must sell over ~25% in a single round, it usually signals the valuation is too low for the amount needed — either you’re raising too early (no traction to lift pre-money) or raising too much at once. Splitting the goal and lifting traction first usually protects equity better.
Same 5bn needed — valuation decides % sold
Raise 5bn at 5bn pre-money (young)
post 10 → sell 5÷10 = 50%
Raise 5bn at 20bn pre-money (has traction)
post 25 → sell 5÷25 = 20%
Raise 5bn at 45bn pre-money (strong traction)
post 50 → sell 5÷50 = 10%
Same money: the higher the pre-money, the smaller the % you sell. Traction is what lifts pre-money — so "earn traction, then raise" is usually cheaper than "raise to fund traction".
Common trap: The "raising a lot = being good" illusion. Raising big at a low valuation can make you sell half the company in the first round, leaving no equity for later and risking loss of control. The good metric isn’t "how much you raised" but "hitting the milestone with the least dilution".
Advanced questions
1. Startup A raises 5bn at 5bn pre-money; startup B raises 5bn at 20bn pre-money. Who sells less equity and why?
→ B, because a higher post-money (25bn) means 5÷25 = 20% < A’s 50%
% sold = investment ÷ post-money. B’s post-money is 25bn so it sells 20%, while A’s post-money is 10bn so it sells 50%. Same money, higher pre-money protects founder equity.
2. Having to sell over ~25% in a single round usually signals what?
→ A valuation too low for the amount needed — possibly raising too early or too much
Selling too much % for one round means each dollar "costs" many shares. Usually from a low pre-money (too early) or raising too much at once; lift traction or split the target.
3. What is a healthy metric for a round?
→ Hit the next milestone with the lowest possible dilution
The goal is to buy "distance to the milestone" with the least equity. Raise just enough to lift the next round’s valuation, not the maximum with heavy dilution.
🎯 Real-life mission
REAL-LIFE MISSION: Pick a Vietnamese startup you admire (e.g. Coolmate). Look up which rounds they raised (pre-seed/seed/Series A/B/C) and which fund led. For each round, set an illustrative pair (raise + pre-money), compute post-money and % sold. Write 3 lines: what you think each round’s money multiplied and why the timing fit.