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Tootsie Roll Pops and Term Sheets

Remember that old commercial with the owl and the Tootsie Roll pop.
The commercial asks the question how many bites does it take to get to
center of a tootsie roll pop. Maybe its because I am near the end of my
fundraising cycle, but this commercial had me wondering about how many
VCs does it take to get to a term sheet?

Everyone has a
different answer so I thought that I would ask several prominent
entrepreneurs about their experiences.  I talked (emailed) to 7 startup
CEOs in Seattle. The questions were:

1. Average number of VCs that you approached per each round for
Series A: ___  Series B:___  Series C: ____  Series D and higher ____

2. Number of total term sheets that you received per round for
Series A: ___  Series B:___  Series C: ____  Series D and higher ____

3. Total amount raised per round:  Series A: ___  Series B:___  Series C: ____  Series D and higher ____

4. Please indicate whether I can include your name/company in the blog post:  Y or N

Overall, the data was very interesting.  This is a small sample and
data can be skewed.  The
categories were across several different verticals: Internet consumer,
enterprise, and B2B software.  Also, the results could be skewed
because each CEO had different levels of experience as a CEO when they
raised their rounds.   But, this is an interesting proxy for the
reader.  The next time you see an entrepreneur smiling, seemingly
without a care in the world, consider these numbers:

  • 21 VCs for their Series A round
  • 31 for the Series B round (hmmm, I wonder why everyone calls it the ‘bitch’ round)
  • 23 for Series C – the numbers dropped amongst the group on average
  • On average each round generated ~ 2 term sheets.  It was
    interesting to note that a couple of the respondents that had lower
    numbers of total VCs that they talked to actually had 3 term sheets per
    each round.  This implies that they must have been consistently
    harvesting relationships as well as focusing on quality conversations.
  • I didn’t publish how much they raised because there was a huge
    variance between the raise amounts per round.  The median amount raised
    was around $45M across the Series A, B, and C rounds.  There was one
    friend of mine in the D range that would have thrown the numbers way
    off (huge round).  I’d be interested to look at more data across more
    verticals.  I wouldn’t be surprised to look at the timing of when the
    money was raised — usually you don’t want to raise money when you need
    to so that is a factor as well as general economic conditions.

Raising money is tough work.  You hear no 90% of the time.  The best
operators play off like its not a big deal but it really isn’t that
fun.  It is a sales process and it is time consuming.  I want to thank
the folks that contributed to this post (everyone asked to be


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