A Founder's Guide to Raising Your First Round

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Before You Start: Are You Ready to Raise?

The most common mistake first-time founders make is starting investor conversations too early. Investors — especially at seed stage — are making a bet on you, your team, and your market. Before you pitch anyone, you should be able to answer these questions clearly:

• What problem are you solving, and for whom?
• Why is now the right time for this solution?
• Why are you and your team the right people to build it?
• What have you built or proven so far?
• How much are you raising, and what will you use it for?

Understanding the Fundraising Stages

Pre-Seed

This is the earliest stage — typically when you have an idea, a founding team, and perhaps an early prototype or proof of concept. Raise sizes at pre-seed in India typically range from ₹25 lakhs to ₹2 crore. Investors at this stage are usually angels, friends and family, or micro-VCs. They're betting almost entirely on the founders.

Seed

You have a product, some early users or customers, and initial signals of product-market fit. Seed rounds in India typically range from ₹2 crore to ₹15 crore. Institutional seed funds, angel networks, and some early-stage VCs participate here. This is where your traction data becomes critical.

Series A

You've demonstrated product-market fit and have a clear path to scaling. Series A rounds typically range from ₹15 crore to ₹80+ crore. At this stage, investors want to see strong unit economics, a repeatable growth model, and a clear use of funds that will take you to Series B metrics.

What Goes Into a Pitch Deck

Your pitch deck is your first impression. Keep it to 10–14 slides and include:

1. Problem — What pain are you solving? How big is it?
2. Solution — What you've built and how it works
3. Market size — TAM, SAM, SOM with credible sources
4. Traction — Revenue, users, growth rate, key milestones
5. Business model — How you make money
6. Competition — Who else is doing this and why you win
7. Team — Why you are the right people to build this
8. Financials — 3-year projections and key assumptions
9. The ask — How much you're raising, at what valuation, and what you'll use it for

How Valuation Works at Early Stage

Early-stage valuation is more art than science. Unlike later stages where you can use revenue multiples, pre-seed and seed valuations are largely based on:

• The strength and track record of the founding team
• Market size and growth rate
• What comparable companies have raised at similar stages
• Your traction and early proof points
• How competitive the deal is (are multiple investors interested?)

In India, pre-seed valuations often range from ₹5–20 crore post-money. Seed valuations typically range from ₹20–100 crore. These are rough benchmarks — actual valuations vary enormously by sector, team, and market conditions.

Understanding a Term Sheet

A term sheet is a non-binding document that outlines the key terms of an investment. The most important terms to understand:

Valuation & Dilution

If a VC offers to invest ₹5 crore at a ₹20 crore pre-money valuation, the post-money valuation is ₹25 crore. The investor gets 20% of your company (₹5cr / ₹25cr). You and your existing shareholders now own 80% of a business worth ₹25 crore on paper.

Liquidation Preference

This clause determines who gets paid first if the company is sold or wound down. A 1x non-participating preference means the investor gets their money back before anyone else — but doesn't double-dip. Watch out for 2x preferences or participating preferred shares, which can significantly reduce founder payouts in an exit.

Anti-Dilution Protection

Protects investors if you raise a future round at a lower valuation (a "down round"). Broad-based weighted average anti-dilution is standard and fair. Full-ratchet anti-dilution is aggressive and bad for founders — push back on it.

Pro-Rata Rights

Gives investors the right to participate in future rounds to maintain their ownership percentage. Standard and generally founder-friendly — it keeps good investors involved.

Finding the Right Investors

Not every investor is right for your business. Before approaching anyone, research:

• Do they invest in your sector?
• Do they invest at your stage?
• What's their typical cheque size?
• What do their portfolio founders say about working with them?
• Do they add value beyond capital (introductions, hiring help, strategic advice)?

A warm introduction is always better than a cold email. Use your network, attend startup events, and build relationships before you need the money — investors fund people they know and trust.

How Akro Ventures Helps Founders Raise

We work with startups at every stage of the fundraising process — from helping you sharpen your narrative and build your pitch deck, to making introductions to the right angels and VCs, to reviewing and negotiating term sheets. If you're preparing for your first raise, we can help you get ready properly.