Funding Kabuki (aka Creativity in Round Naming)

In the last 48 hours I’ve seen funding solicitations for the following “Pre-A” financings: Advisory Round, Friends & Family, Seed Alpha, Seed Plus, Seed, Accelerator Round, Traction Round. And I’m probably forgetting a few. Boy we’re getting creative in our fundraising narratives…

On one hand it doesn’t really matter, who cares what it’s called – any smart investor is going to look at real metrics of traction and cap table. You can’t fake the numbers. If your startup is raising its third financing to explore yet another pivot, I know it smells, no matter what fancy name you invent.

But at the same time it bothers me a bit – it’s funding kabuki – and I can’t help but see it as a negative signal for where energy is being focused. Making decks, naming rounds.

What if we standardized on funding like the convention of software releases? Round 1.0, Round 2.0, etc. Each advance in version number represents a change in financing terms. A point release (eg R1.1) suggests more money raised at the same – or substantially similar – terms.

Nah, will never happen. Pardon me, I need to review a deck for someone’s Superhero Beta Round.

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