Raising a seed round means securing your company's first substantial outside capital, which is intended to move your working prototype towards a viable product with paying or engaged users. The median US seed round was approximately US$3 million in 2025, roughly three times larger than it was in 2018. Seed rounds are the middle stage between pre-seed funding, in which you potentially raise money from friends and family before incorporating, and the larger, metrics-driven Series A that comes later. Learning how to raise a seed round involves more than a good pitch. Investors will likely expect complete, accurate, and well-maintained formation documents, a specific fundraising strategy, and an understanding of which financial instrument fits your situation.

Below, we'll discuss what investors typically look for before they'll consider writing a cheque, how to build a pitch and find the right people to send it to, and the trade-offs between Simple Agreements for Future Equity (SAFEs), convertible notes, and priced equity rounds.

Key takeaways

• A seed round trades company ownership for capital that typically funds 12–18 months of initial operations.

• Seed rounds generally close using a SAFE or convertible note rather than a priced equity round, since these instruments are faster and cheaper to execute.

• Investors usually expect proper incorporation, an accurate and up-to-date capitalisation (cap) table, and basic financial documentation before they'll seriously consider a pitch.

What is a seed round?

A seed round is the first official stage of raising outside money after forming a startup. It typically involves receiving funds in exchange for a stake in the company.

You might be ready to raise a seed round if you can show the following:

• Product: A working product or prototype solving a specific problem for early users, even if the product still needs refining

• Traction: A waitlist, pilot customers, or somewhere between US$5,000 – US$50,000 in monthly recurring revenue

• Team: A founding team with the technical or domain background to execute, ideally with at least one full-time technical co-founder

• Market: A general sense of your total addressable market and a specific reason why now is the right moment to build this

What do investors expect before you raise a seed round?

A startup with unclear ownership or a messy capitalisation (cap) table can signal risk before you've even made your pitch.

Here's what investors typically expect to see:

• Incorporation: Seed investors might expect a Delaware C corp, the structure that standard financing documents such as Y Combinator's SAFE assume by default.

• Cap table: Ownership needs to be clean and current, with founder equity subject to vesting, typically four years with a one-year cliff.

• 83(b) elections: Founders holding restricted stock need to file an 83(b) election within 30 days of the grant; missing the deadline can create a costly tax problem later.

• Financial projections: Investors typically want a 12- to 18-month map of predicted company performance, with hiring plans and burn rate broken down month by month.

• Formation basics: The startup needs to have all the necessary business elements such as an Employer Identification Number (EIN), a business bank account separate from personal finances, and signed intellectual property (IP) assignment agreements from founders and early contributors.

How do you build a pitch and find investors for a seed round?

A seed deck needs to cover the problem, your solution, the market size, any traction so far, your team, and information about the round itself, including how much you're raising and what it will unlock. Ideally, the deck will make sense without you needing to present it.

There are a few categories of seed stage investors:

• Angel investors: Often operators or founders themselves who invest between US$10,000 – US$100,000

• Micro venture capital (VC) funds: Seed-focused firms investing roughly US$250,000 – US$2 million; these sometimes lead the round

• Accelerators: Programs such as Y Combinator (YC) or Techstars invest a set amount for equity and provide a demonstration day audience of investors

Cold outreach (i.e., reaching out to those with whom you have no prior relationship) tends to convert at a low rate. Consider building a target list of 50 – 100 investors and prioritising warm introductions from other founders, lawyers, or existing angels. A simple spreadsheet that tracks each investor's stage focus, cheque size, and where they are in your pipeline (e.g., contacted, meeting scheduled, passed, committed) keeps a round from stalling in follow-up.

What funding instruments are used in a seed round?

Seed rounds typically close using one of three instruments. Each handles dilution differently.

Simple Agreements for Future Equity (SAFEs)

A SAFE isn't equity initially; it converts into shares at a future priced round, usually with a valuation cap, a discount, or both. YC's postmoney SAFE fixes the investor's ownership percentage at the moment of investment, which can make dilution maths more predictable for founders stacking several SAFEs across a round.

Convertible notes

A note works like debt until it converts. Initially, it carries an interest rate, commonly 5% – 8%, and a maturity date, typically 18 – 24 months out, at which point it either converts into equity or, in rare cases, must be repaid.

Priced equity rounds

A priced round sets a valuation upfront and issues preferred stock directly. It usually includes more negotiated terms, such as a board seat, pro rata rights for future rounds, and protective provisions, and can take longer to close because it requires full legal documentation.

How do you close a seed round?

Closing means turning verbal commitments into signed documents and funds in the bank. The process usually follows a set order.

1. Signing

Investors sign the SAFE, note, or stock purchase agreement, along with any side letters that cover information rights or pro rata rights.

2. Countersigning

The company countersigns and issues a certificate or book entry for each security.

3. Wiring funds

Investors send money to the company's bank account, often in batches as each one finalises their side of the paperwork.

4. Updating the cap table

Ownership is recorded immediately, whether in a spreadsheet or a tool such as Carta or Pulley, so it stays accurate as new money comes in.

What should you do after closing a seed round?

Once funds settle, a handful of steps can help protect your company.

Here's what you can do:

• Cap table updates: Issue final stock certificates or SAFE records to every investor who wired funds.

• Spending controls: Set up a real budget against your burn rate, since a seed round is only meant to last until the next milestone.

• 409A valuation: Get this done before granting any employee stock options, so option strikes are priced correctly and don't create tax problems for new hires.

• Investor updates: Send a short update within the first month that covers what the money is funding and what the next 90 days will look like.

How Stripe Atlas can help

Stripe Atlas handles everything you need to legally launch your company – incorporation, employer identification number (EIN), equity setup, and tax filings – so you can fundraise, open a bank account, and start accepting payments in as little as two business days, from anywhere in the world.

Join 100,000+ startups incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z, and General Catalyst.

Get started in minutes

The application takes under 10 minutes. You'll choose your company structure, confirm your name is available, add up to four co-founders, set your equity split and e-sign. Then Atlas takes it from there, including notifying co-founders to sign their documents electronically.

Fundraising with SAFEs

Once incorporated, you can open a SAFE round directly from your Stripe Dashboard. Create board approval documents, issue YC-standard SAFEs and track investor commitments – without switching tools. If you have Stripe Treasury, investor capital lands directly in your Stripe financial account.

Banking and payments before your EIN arrives

Atlas files your EIN application automatically after incorporation. You don't have to wait – Atlas enables pre-EIN payments and banking so you can start accepting payments and making transactions right away. US founders with a Social Security number are typically eligible for expedited IRS processing.

Automatic 83(b) tax election filing

Atlas files your 83(b) election for you – US and non-US founders alike – with U.S. Postal Service certified mail and tracking to reduce personal income taxes. You'll get a signed 83(b) election and proof of filing directly in your Stripe Dashboard, with certified mail confirmation.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company. Atlas C corp documents are built in collaboration with Cooley, one of the world's leading venture capital law firms. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution and tax compliance.

US$2,500 in Stripe credits, plus US$50K+ in partner discounts

Atlas startups get US$2,500 in Stripe product credits for their first year, plus US$50,000+ in discounts on essential tools – Mercury, AWS, Carta, Xero, Perplexity, and more. Delaware registered agent service is also included free for your first year.

Learn how Stripe Atlas gets your company incorporated, funded and running – all in one place.

FAQs about how to raise a seed round