The first eighteen months after a seed round

A seed round is usually sized to last about two years. In practice, most companies have about eighteen months to show enough progress to raise again, because the next raise itself takes three to six months and nobody wants to run it with an empty bank account.

Eighteen months sounds generous on the day the money arrives. It is not. What follows is what we have seen work across the seed companies we have backed, written for founders in the first weeks after closing.

Decide what the next round needs to see

Before spending anything, write down what a Series A investor will need to believe in eighteen months’ time. Be specific. It is rarely “more revenue”. It is more often a statement like “customers in two different segments renew at a full price” or “the product works without the founders installing it”.

That statement becomes the filter for every decision that follows. Hires, features and markets all get measured against it. Anything that does not move the company towards it waits.

We ask founders to share this with their board in the first meeting after the round. It is the most useful page they will write all year.

Hire slowly at first

The temptation after a round is to hire quickly. Resist it for the first three months.

The first five or six hires set the culture and the pace of the company more than anything the founders say. Each one should be someone the founders would be glad to work for one day. That takes time to find, and it is worth taking.

It also matters what order they come in. Most seed companies need engineers before they need salespeople, and need salespeople before they need managers. A head of anything is usually premature before the Series A.

Spend on learning, not on scale

The best uses of money are the ones that answer the question in the first section quickly: more customer conversations, short paid pilots, a second version of the product built on what the first version taught you.

The worst uses are the ones that assume the answer. Large marketing budgets, expensive offices and enterprise-grade tooling all assume a company has found something to scale. Most seed companies have not, yet.

At this stage, money should buy information.

A note on pricing

Charge from the start, even if the price is low. A customer who pays tells you far more than one who does not, and a price is much easier to raise than to introduce.

Two companies, two routes

Two companies we backed at pre-seed in 2021 faced the same clock and took very different routes.

The founders of Quillo, which automates accounts payable, decided early that the next round needed to see one thing: finance teams at mid-sized companies using the product every week without help. They spent the first six months with only three engineers and twenty design partners, and turned away larger customers who wanted custom work. By month fourteen, weekly use had held steady for two quarters, and the Series A followed quickly.

Tabula, which builds spreadsheets for operations teams, had a harder start. Its first product was too broad, and by month nine the founders could see that usage was wide but shallow. They narrowed the product to logistics teams and cut two planned hires. It cost them three months. It also gave them a story the next investors could believe, and they raised at month twenty with a much clearer business.

Both companies kept their burn low enough to survive a slower raise. That, more than any single decision, is what gave them room to change course.

Know your numbers every month

A seed company does not need a finance team. It does need a founder who knows, each month, how much cash is left, how fast it is going, and how that compares with the plan.

We suggest a short monthly update to investors with three things: the numbers, the progress against the statement you wrote at the start, and one thing you need help with. Lena’s platform team can share a template.

When to start the next raise

Start conversations with Series A investors about twelve months after closing, informally. Begin the actual raise when you can show the progress you set out to show, and when you still have at least nine months of cash. If you cannot yet show it, raise less, cut spending, or ask your existing investors for a bridge while there is still time to use it well.

If you are a founder in our portfolio and want to talk through any of this, Hana and Lena are the people to ask.