Startup Funding Stages: Genesis Investments Focus And Criteria

Genesis Investments (GI) works with early-stage ventures and usually invests at Seed & Pre-Seed rounds. Then, GI helps founders reach proper KPIs and raise Series A and Series B rounds. 

At each round of financing, a startup should fit generalized assessment criteria. And each VC-fund has its reasons to focus on the particular rounds. In this article, we will tell you what GI’s criteria are, which stages we invest in, and what exceptions to the thesis might occur.

Pre-Seed Funding

This is the earliest venture stage, where startups seek their first financial support after a "friends and family" round. Even though the pre-seed amount is usually small, it doesn’t mean that you should come with an intangible idea and without any product. At this stage, we expect to meet passionate teams with a Minimum Viable Product, a clear market opportunity, and go-to-market strategy. Hence, if you are a pre-seed startup that decided to apply for financing from GI, be ready to show us feedback from your early-adopters and prove that you’ve found some product-market fit.

One of the most obvious criteria for determining the financing stage is the amount received by the startup. At Genesis Investments, we invest between $100,000 and $200,000 at the Pre-Seed stage. These are approximate numbers, which may vary depending on the business.

Seed Funding

This round is a further point in the startup lifecycle. Startups at this stage have initial traction and founders have user metrics and recurrent revenue to demonstrate. By this stage, startups should have a solid proof of product-market fit based on real-life data (e.g. paying customers, paid demos, etc.). You will probably grow the number of your employees and prove your recruiting and management capabilities before you start raising Seed-round. Even though at GI we focus on hardworking teams and product-market fit rather than in revenue charts, at Seed Stage financial results and monthly growth are important, too.

At Seed Stage, VC-funds usually look at companies with $10,000-$20,000 revenue per month. Genesis Investments focuses on Seed funding and invests between $200 thousand and $1 million at this stage. The amounts mentioned above may vary based on various factors.

“Series” Funding

By "Series" Funding we mean Series A, B, and C rounds, which involve larger investment amounts and mature startup development stages:

  • Series A.  Crunchbase report on 99 startups shows that the average round A amount ranges between $1 and $6.5 million. This round is all about reaching precise milestones in product development and business expansion. 

  • Series B. At this stage investment amount ranges between $6 and $10 million. According to Statista report, the median round B deal size in Europe reached  $23.3 million in 2019, compared to $5.5 million in 2010:

Median venture capital (VC) deal size in Europe from 2010 to 2019, by series (in million U.S dollars), Statista
Median venture capital (VC) deal size in Europe from 2010 to 2019, by series (in million U.S dollars), Statista

This round is all about scaling. Startups at this point tend to have a large customer base and target annual sales growth.

  • Series C. This is a mature stage. Crunchbase Glossary defines Series C round as stage for established companies, which involves a $10M+ investment amount.

Since the launch of the fund, Genesis Investment has considered deals at Pre-Seed, Seed, and even Series A stages. Even though one or two transactions per year might be within Series A ranges, early-stage rounds will be the major focus of GI in the upcoming years.

Why GI Focuses Mostly on Seed & Pre-Seed Rounds

Early-stage financial support is necessary in countries with a young startup ecosystem, such as Ukraine, Belarus, and Baltic countries. In these countries, it is difficult to get financing from Western investors at the early stages, due to the high risks associated with Easter European geographies. Hence, the future unicorn might not be able to scale and become noticeable in the European startup arena and may run out of cash before growing large. 

Venture capital firms in Europe and the USA have larger amounts of money to invest. And usually, they prefer to invest in Eastern European startups when they already reached Series A or Series B stage. Knowing this, Genesis Investments helps promising early-stage startups reach the milestones mentioned above and make startups from our geographies investable for top-notch VC-funds. 

If the criteria of our investment thesis suit your financing demands, please check the related article — 👉  Applying for financing to Genesis Investments: required documents and communication tips.