Startup Fundraising Rounds Explained: Seed to Series C+ in 2025
If you are new to venture fundraising, the alphabet soup (pre-seed, seed, A, B, C…) can feel like gates you must unlock in a fixed order. In practice, rounds are milestones in risk reduction. Labels vary by market cycle and business model. The core idea is constant: each round converts a new set of risks into knowable facts—customers, retention, margins, efficient growth—so new investors can underwrite the next leap.
Seasoned investors increasingly emphasize this stage-by-stage maturity over rigid "Series" labels. Carta's 2025 data shows seed and Series A valuations trending up even as deal counts tighten, which means investors are choosier and proof matters more.
This guide breaks down every stage from pre-seed to Series C+, the instruments you will encounter, what investors expect to see, and the documents you should prepare. It also shows where a professional fundraising data room fits in—so you can run a clean process at any stage.
First principles: how rounds actually work
Funding instruments
- SAFE (Simple Agreement for Future Equity): a short agreement (popularized by Y Combinator) where investors fund you now in exchange for future shares, typically at a valuation cap or with a discount. There's no interest and usually no maturity date. Most U.S. pre-seed/seed rounds still use SAFEs or notes. (Y Combinator)
- Convertible note: debt that converts into equity in a future round, often with interest, a discount, and/or a cap.
- Priced equity round: investors purchase preferred stock at a negotiated valuation and terms (the "term sheet"), which can include rights such as a liquidation preference (who gets paid first if the company is sold). (Cooley GO)
Market reality in 2025
Median U.S. seed round size in 2024 was about $2.5M with a $14–16M median pre-money valuation. In 2025, seed medians ticked up even as deal counts fell—early-stage valuations hit new highs while the number of deals declined.
This selectivity means only the best-prepared clear the bar. Competition for high-quality deals is intense, so many companies take bridge/extension rounds at seed before a priced Series A (the "Series A crunch"). Round pacing has also slowed: the A→B gap now stretches to 2.5–3 years in many cases, requiring longer runways and more thorough diligence. Plan from milestones, not months.
Pre-Seed — From idea to first proof
Purpose: Show the problem is real, the wedge is sharp, and users will try it.
Typical raise & valuation (U.S. 2025):
- Round size: often $0.5–$2.0M (many below $1M).
- Valuation/caps: many SAFEs under $250k had a $7.5M median cap in Q2’25; larger pre-seeds frequently use SAFEs too, with the SAFE/convertible mix dominating the stage. (Carta)
Common instruments: SAFE / convertible note (SAFEs are ~90% of pre-seed rounds on Carta). Learn more about raising seed funding and setting up a data room for seed rounds.
Milestones / metrics investors look for:
- A working prototype or MVP and direct user evidence: 10–30 interviews, pilot MoUs, or early paid tests.
- A clear 90-day plan to validate the wedge and an 12–18-month budget that funds that plan.
- For software, early activation signals (users reach the “aha moment” quickly) and weekly engagement that doesn’t fall to zero.
Timeframe & dilution: 9–18 months to seed is common. Dilution varies with caps and size.
Pitfalls: Counting sign-ups as traction; shipping an MVP without a success criterion. Fix by defining one binary test you'll hit within weeks.
Seed — From promise to repeatable traction
Purpose: Prove users stay and there is a repeatable path to revenue or durable engagement.
Typical raise & valuation (U.S. 2024–2025):
- Median seed round size: $2.5M (2024).
- Median pre-money valuation: $14.8–16.0M (2024 median $14.8M; Q1’25 median $16M). (Carta)
Common instruments: SAFE or priced seed; both are standard. When sharing materials with investors, use a secure data room to protect your pitch deck and financials.
Milestones / metrics investors look for (examples by model):
- B2B SaaS: early retention (cohorts that flatten, not decay), first renewals or expansion, and credible payback direction; a coherent ICP and repeatable top-of-funnel to demo/close. a16z and Bessemer emphasize retention and payback over vanity growth. (Andreessen Horowitz)
- Consumer/network: DAU/MAU stability, 4–12-week cohort retention, organic loop contribution; paid users come back without incentives.
Process reality in 2025: Fewer companies clear the seed bar; many run bridge/extension rounds to reach A-level proof. (Axios)
Pitfalls: Mixing trials/pilots with paid ARR. Fix by labeling clearly and showing conversion gates.
Series A — From traction to a scalable engine
Purpose: Demonstrate a repeatable go-to-market (GTM) with reliable unit economics.
Typical raise & valuation (U.S. 2025):
- Median cash raised: ~$7.9M in Q1’25 (typical range ~$5–15M).
- Median pre-money valuation: ~$48M in Q1–Q2’25. (Carta)
Milestones / metrics investors look for (SaaS illustration):
- ARR level: commonly $1–3M ARR at A for SaaS companies (not a rule, but a frequent pattern operators cite). (saastr.com)
- Retention & expansion: cohorts that settle high; early NRR signal (>100% is a positive sign).
- Efficiency: improving payback, clear contribution margin after variable costs, first sales productivity (ramp curves, win rates).
- Pipeline quality: stage-to-stage conversion that matches the forecast; 3–4× qualified coverage on near-term targets is common.
Timeframe & dilution: Expect deeper metric reviews and board-level diligence. Founder dilution per round varies; overall dilution trends have eased outside seed compared to 2023.
At Series A, investors expect comprehensive materials. Prepare a complete data room checklist with financials, legal docs, and customer metrics.
Pitfalls: Top-line growth while efficiency deteriorates. Fix by showing growth and gradually improving unit economics.
Series B — From engine to repeatable scale with quality
Purpose: Prove the system scales—people, process, and product—without breaking economics.
Typical raise & valuation (U.S. 2024–2025):
- Median deal size (U.S.): around $30M at Series B (KPMG / PitchBook view, 2019–2025 trend).
- Valuation context: 2024 Carta data pegs median pre-money for Series B in low-nine digits; AI companies skew higher (2024 AI Series B: $25.6M median round size; $143M median pre-money). (KPMG)
Milestones / metrics investors look for:
- Management depth: VP/Director layer with hiring and enablement plans.
- Multi-channel GTM: ROI by segment/channel; disciplined pruning where returns decay.
- Operational rigor: forecast accuracy; stable release cadence; CS SLAs met.
- Financial maturity: credible multi-year model with scenarios and a believable path to profitability at scale.
Timeframe: The A→B gap has lengthened; some analyses show it approaching ~2.5–3 years median. Plan runway accordingly. (Axios)
Pitfalls: Expanding product lines before core retention is durable. Fix by proving additive lifetime value before broadening.
Series C and Beyond — Toward category leadership or liquidity prep
Purpose: Show durable leadership, efficient deployment of large dollars, and governance readiness.
Typical raise & valuation (U.S. 2025):
- Median deal size (U.S.): ~$50M at Series C; later rounds rise from there (D medians near ~$100M per KPMG trend view).
- Valuation context: Late-stage valuations rebounded from 2024 troughs; C+ rounds can cluster around high-hundreds-of-millions to $1B+ pre-money, with wide dispersion by sector. (KPMG)
Milestones / metrics investors look for:
- Board-quality reporting: consistent definitions and reconciliations.
- Margin shape & operating leverage: durable gross margin and improving cash conversion.
- Compliance & risk: security/privacy governance and audits appropriate to scale.
- Strategic pipeline: M&A, partnerships, or international expansion with integration discipline.
Pitfalls: Using M&A to mask organic softness. Fix by separating organic vs. inorganic performance and showing integration playbooks.
Term-sheet concepts you should model before you sign
Before you sign any term sheet, understand these key concepts:
Liquidation preference (1x non-participating vs. participating): Who gets paid first in a sale and whether preferred also "participates" with common. The baseline in venture is 1x non-participating; deviations are more investor-friendly. (Cooley GO)
Anti-dilution: Adjusts investor price per share in a down round (weighted-average is common; full ratchet is harsh).
Pro rata rights: Right to buy in future rounds to maintain ownership.
Protective provisions: Actions that need investor consent (e.g., issuing senior securities, selling the company).
Important: Participating preferred and >1x prefs can materially change founder outcomes in lower-exit scenarios—run the math before you accept.
How much to raise and when
Budget from milestones, not months. Define the proof you will show by the end of runway (e.g., retention target, payback threshold, sales productivity), then price the team and experiments needed to get there with buffer.
Expect longer gaps between A and B. Carta/press analyses show elongated timelines and more bridges; plan runway accordingly.
Assume more partner meetings per close in later stages. The bar for quality (not just growth) is higher than during ZIRP.
Quick reference: what “good” looks like at each stage
Pre-Seed
- Prototype/MVP; 10–30 real customer conversations; first small pilots or paid tests.
- 90-day test plan with binary success criteria; 12–18-month budget.
- SAFE/notes dominant; caps often mid-single-digit millions for very small checks. (Carta)
Seed
- Cohorts flattening; early renewals/expansion or durable engagement.
- Clear ICP, repeatable acquisition path, and a pragmatic 12–24-month model.
- Round size around low-single-digit millions; pre-money medians mid-teens. (Carta)
Series A
- ~$1–3M ARR common in SaaS, plus improving payback and sales productivity; believable pipeline quality.
- Median raise around $8–10M; median pre-money near $48M.
Get strategic guidance with our complete fundraising strategy guide.
Series B
- VP/Director layer in place; multi-channel GTM with segment ROI; forecast accuracy.
- Median deal size roughly $30M in U.S. trend data; valuations frequently $80–120M+ with sector spread; AI B’s skew higher. (KPMG)
Series C+
- Board-quality reporting; efficient growth; compliance maturity; optionality (M&A, new lines, geos).
- Median deal size ~$50M+; later rounds larger; late-stage valuations rebounded into high-hundreds-of-millions to $1B+ territory for quality names.
By this stage, you're likely dealing with M&A activity. Ensure your data room practices align with M&A due diligence standards.
Streamline Your Fundraising Process with Peony
Running a successful fundraising round requires more than just great metrics—you need to present your materials professionally and maintain control throughout the process.
Peony is designed specifically for high-stakes fundraising, with features that matter at every stage:
Secure data room that impresses investors with clean organization and dynamic watermarks that protect against leaks.
Investor-grade organization that helps you share the right documents at the right time, with granular access controls and activity tracking.
Time-saving workflows that eliminate the back-and-forth of document requests. Upload once, share with multiple investors, and see who's engaged with your materials.
Whether you're raising a pre-seed SAFE or a Series C priced round, Peony keeps your process tight and professional. You bring the evidence; we keep the process clean.
Final word
You now have the working numbers—sizes, valuations, and milestone checklists—and the investor logic that sits behind them. If you keep your cohorts honest, your payback improving, and your story anchored to proof, you'll be taken seriously at every stage.