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A capitalization table (cap table) is a document that outlines the ownership structure of a company. It details who owns what percentage of equity, including:

• Founders
• Investors (angel investors, VCs, etc.)
• Employees with stock options
• Convertible note or SAFE holders

As your startup grows, your cap table evolves through funding rounds, option grants, and equity-related transactions. Keeping it organized and accurate is crucial for maintaining transparency and making strategic decisions.

Why is a cap table important?

A well-maintained cap table impacts fundraising, investor relations, and equity management. Here’s why it matters:

1. Investor transparency

Investors rely on cap tables to understand:
✔ Their ownership stake
✔ Potential dilution in future rounds
✔ How equity is distributed across stakeholders

2. Fundraising strategy

A clear cap table helps founders:
✔ Determine how much equity to offer new investors
✔ Structure rounds without over-diluting existing shareholders
✔ Maintain control over decision-making

3. Employee compensation & retention

Startups use stock options to attract and retain top talent. A well-managed cap table ensures:
✔ Fair allocation of equity grants
✔ Transparency in vesting schedules
✔ Compliance with option pool limits

4. Exit planning (acquisition or IPO)

When a startup is acquired or goes public, a clean cap table simplifies:
✔ Valuation discussions
✔ Payout structures for all shareholders
✔ Negotiations with potential acquirers

Key components of a cap table

A comprehensive cap table includes:

1. Founder equity

The shares owned by the founding team, typically issued at incorporation.

2. Investor equity

Shares issued to angel investors, venture capital firms, or strategic partners during fundraising rounds.

3. Employee stock options

Equity granted to employees as part of a stock option plan (ESOP), which includes:
✔ Vesting schedules (e.g., 4-year vesting with a 1-year cliff)
✔ Exercise price and expiration terms

4. Convertible securities

SAFE notes, convertible debt, or other instruments that convert into equity during future funding rounds.

5. Ownership percentages

The breakdown of equity across all stakeholders, showing each party’s stake in the company.

6. Dilution effects

The impact of future funding rounds on existing ownership percentages, ensuring founders and investors understand potential dilution.

How to manage your cap table effectively

1. Use cap table management software

Tracking your cap table manually in spreadsheets can lead to costly errors. Instead, use cap table management platforms such as:

• Carta – Popular for VC-backed startups
• J.P. Morgan – Cap table management with integrated equity tracking and investor reporting for startups.
• Pulley – Designed for early-stage companies
• Capshare – Equity management for startups

💡 Pro tip: Most investors expect cap tables to be maintained in software rather than a basic Excel spreadsheet.

2. Keep your cap table up-to-date

Your cap table should be updated whenever there is an equity-related transaction, including:

• New fundraising rounds
• Stock option grants or vesting milestones
• Employee terminations (which may involve stock buybacks)
• SAFE or convertible note conversions into equity

💡 Pro Tip: Investors will always review your cap table before making an investment decision. Keep it clean and organized.

3. Model future dilution scenarios

Before raising capital or granting stock options, model different scenarios to understand potential dilution.

Scenario modeling helps founders:

• Plan how much equity they can afford to offer investors
• Assess post-money valuation impact
• See how future funding rounds affect ownership

Most cap table management tools (e.g., Carta, Pulley) offer built-in scenario modeling to help with planning.

4. Understand equity dilution

Every time a startup issues new shares, existing shareholders’ ownership percentage decreases.

💡 Example of dilution:

• A founder owns 40% equity before a funding round.
• After raising a $3M seed round in exchange for 20% equity, the founder’s stake reduces to 32%.

🚀 How to minimize unwanted dilution:

• Set realistic valuation expectations before fundraising.
• Maintain a healthy option pool without excessive dilution.
• Carefully negotiate SAFE & convertible note terms.

5. Consult legal and financial experts

Cap table management involves complex financial and legal structures. Mistakes can lead to ownership disputes or compliance issues.

When to seek expert advice:

• Structuring funding rounds & term sheets
• Managing stock option grants & vesting schedules
• Converting SAFEs & convertible notes

💡 Pro Tip: Many founders miscalculate dilution when raising capital. Having an expert review your cap table ensures long-term equity strategy.

Final thoughts: your cap table is more than a spreadsheet

Your cap table is one of the most important financial documents in your startup. It impacts:

✔ How much equity you own as a founder
✔ How investors evaluate your company
✔ Your ability to raise future capital without excessive dilution

By using cap table management tools, staying organized, and modeling dilution, you can ensure your fundraising strategy aligns with long-term growth goals.

🚀 Need help managing your fundraising process? Capwave.ai provides AI-driven investor lists with over 60,000 angel and VCs. Plus, get 24/7 pitch deck insights to help your startup scale efficiently. Sign up today!

FAQs

1. What’s the best way to manage a cap table?

Use cap table software like Carta or Pulley instead of spreadsheets to avoid costly errors.

2. How often should I update my cap table?

Whenever you:
✔ Raise a new funding round
✔ Grant or vest employee stock options
✔ Convert SAFE or convertible notes

3. What’s the biggest mistake founders make with cap tables?

Not modeling dilution before fundraising. This can lead to unexpected loss of ownership.

4. Do early-stage startups need a cap table?

Yes! Even if you have only a few shareholders, it’s crucial to track ownership and dilution from the start.

📢 Get AI-charged fundraising support with Capwave.ai!

We’re thrilled to share that Capwave AI has been featured in CanvasRebel! In this exclusive feature, our founder and CEO, Charlotte Ketelaar, discusses the challenges founders face when raising capital, how her background in investment banking and startup mentorship shaped her approach, and why she built Capwave.ai to revolutionize the fundraising process.

Inside the CanvasRebel feature:

In the article, Charlotte shares:

• The biggest hurdles early-stage founders encounter when trying to secure funding.
• Why traditional fundraising methods are inefficient and time-consuming - and how AI can change that.
• How Capwave AI is helping founders connect with the right investors faster using AI-driven tools.

What is Capwave AI?

Capwave AI is designed to help founders streamline fundraising, save time, and increase investor engagement. Our platform includes:

• AI-driven investor matching to connect founders with aligned investors based on industry, traction, and stage.
• AI-powered pitch deck analysis, providing real-time feedback to strengthen investor presentations.
• Masterclass and fundraising resources, equipping founders with expert guidance on refining their fundraising approach.
• Exclusive access to a Slack fundraising community, connecting founders with peers raising in the same stage.

Read the full feature

A huge thank you to CanvasRebel for highlighting our mission! This feature showcases how Capwave AI is reshaping the fundraising landscape and empowering founders with smarter, more strategic investor connections.

📖 Read the full article on CanvasRebel

Series A funding is a pivotal milestone for startups. At this stage, investors are looking for strong product-market fit, scalable business models, and early traction in the market.

This month, 15 Series A startups successfully raised funding, securing capital to scale operations, expand teams, and drive innovation. From AI and robotics to quantum computing, fintech, and biotech, these companies are shaping the future of their industries.

1. Apptronik: $350M to revolutionize human-centered robotics

Apptronik designs and builds advanced robotics systems to enhance human-machine collaboration in industrial environments.

• Industry: Artificial Intelligence, Robotics, Industrial Automation
• Location: Austin, TX
• Lead Investors: B Capital, Capital Factory
• Other Investors: Google, Scrum Ventures, Trajectory Ventures
• Website: apptronik.com

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2. QuEra Computing: $230M for next-gen quantum computing

QuEra Computing is developing neutral-atoms-based quantum computing solutions to tackle complex computational challenges.

• Industry: Quantum Computing
• Location: Boston, MA
• Lead Investor: SoftBank Vision Fund
• Other Investors: Alphabet, Google, QVT Financial, Safar Partners, Valor Equity Partners
• Website: quera.com

3. Newleos Therapeutics: $93.5M for neuroscience drug development

Newleos Therapeutics is a biotech startup dedicated to producing safer and more effective neuroscience medicines.

• Industry: Biotechnology, Neuroscience
• Location: Boston, MA
• Lead Investor: Goldman Sachs Alternatives
• Other Investors: Arkin Bio Ventures, DCVC Bio, Longwood Fund, Novo Holdings
• Website: newleos.com

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4. Music AI: $40M to transform music technology with AI

Music AI develops artificial intelligence solutions for music and audio technology, enhancing content creation and production.

• Industry: Artificial Intelligence, Music Tech
• Location: Salt Lake City, UT
• Lead Investors: Connect Ventures, monashees
• Other Investors: New Enterprise Associates, Samsung NEXT, Steve Aoki, Toba Capital
• Website: music.ai

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5. Castelion: $70M to advance defense tech innovation

Castelion applies modern hardware development and manufacturing processes to address national security challenges.

• Industry: Aerospace, Defense Tech, Manufacturing
• Location: El Segundo, CA
• Lead Investor: Lightspeed Venture Partners
• Other Investors: Andreessen Horowitz, BlueYard Capital, Cantos, First In, Silent Ventures
• Website: castelion.com

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6. TrueFoundry: $19M to streamline enterprise AI deployment

TrueFoundry is an enterprise platform that helps teams build, deploy, and manage large language models at scale.

• Industry: Artificial Intelligence, Machine Learning, DevOps
• Location: San Francisco, CA
• Lead Investor: Intel Capital
• Other Investors: Eniac Ventures, Jump Capital, Peak XV Partners, Trajectory Ventures
• Website: truefoundry.com

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7. ConverzAI: $16M to automate recruitment with AI-powered virtual recruiters

ConverzAI provides AI-driven virtual recruiters that streamline hiring, improving efficiency for HR teams.

• Industry: AI, HR Tech, Recruiting
• Location: Seattle, WA
• Lead Investor: Menlo Ventures
• Other Investors: Afore Capital, Foundation Capital, Left Lane Capital
• Website: converzai.com

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8. Beamable: $13.5M to decentralize gaming infrastructure

Beamable is building decentralized infrastructure to enhance gaming experiences with social, commerce, and content management features.

• Industry: Gaming, Developer Tools
• Location: Boston, MA
• Lead Investor: BITKRAFT Ventures
• Other Investors: Solana Foundation, Polygon Ventures, Defy.vc
• Website: beamable.com

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9. Posterity Health: $13M to improve male fertility care

Posterity Health is a male fertility clinic offering comprehensive assessments, hormone treatments, and vasectomy services.

• Industry: Health Tech, Fertility
• Location: Parker, CO
• Lead Investor: Georgetown Equity Partners
• Other Investors: FCA Venture Partners, SteelSky Ventures, Distributed Ventures
• Website: posterityhealth.com

10. ScorePlay: $13M for AI-powered sports media management

ScorePlay is an AI-driven digital asset management system for sports-specific media workflows.

• Industry: Sports, Media Tech
• Location: New York, NY
• Lead Investor: The Twenty Minute VC
• Other Investors: Seven Seven Six, FIBA, Nico Rosberg, Trybe Ventures
• Website: scoreplay.io

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11. Superlogic: $13.7M to enhance experiential rewards with AI

Superlogic offers an AI-powered personalization and rewards platform, integrating blockchain and brand marketing.

• Industry: AI, Blockchain, Marketing Tech
• Location: Miami, FL
• Lead Investor: Power Ledger
• Other Investors: American Express, Dispersion Capital, Galaxy Interactive, Liquid 2 Ventures
• Website: superlogic.com

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12. Atomicwork: $25M to modernize IT service management

Atomicwork provides conversational AI-driven IT service management (ITSM) software for enterprise teams.

• Industry: IT, SaaS, Human Resources
• Location: San Francisco, CA
• Lead Investors: Khosla Ventures, Z47
• Other Investors: Battery Ventures, Blume Ventures, Storm Ventures
• Website: atomicwork.com

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13. Suger: $15M for AI-driven marketplace automation

Suger is an AI-powered marketplace platform that manages product listings, contracts, metering, and billing.

• Industry: SaaS, B2B Software
• Location: Daly City, CA
• Lead Investor: Threshold
• Other Investors: Craft Ventures, Intel Capital, Y Combinator, Pioneer Fund
• Website: suger.io

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14. Lynx: $27M to integrate fintech and healthcare payments

Lynx provides an API-driven platform for businesses to integrate financial services, banking, and healthcare payments.

• Industry: FinTech, Health Tech
• Location: Boston, MA
• Lead Investor: Flare Capital Partners
• Other Investors: CVS Health Ventures, McKesson Ventures, Obvious Ventures
• Website: lynx-fh.com

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15. SGNL.AI: $30M for dynamic access management solutions

SGNL.AI is an AI-powered security platform that offers context-based identity management for enterprises.

• Industry: Cloud Infrastructure, Identity Management
• Location: Palo Alto, CA
• Lead Investor: Brightmind Partners
• Other Investors: Cisco Investments, Costanoa Ventures, M12 - Microsoft's Venture Fund
• Website: sgnl.ai

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💡 Series A funding surges in AI, Robotics, and FinTech

Investors continue backing AI, quantum computing, and fintech startups that show strong early traction and scalable business models.

Raising a seed round is a critical milestone for startups. Investors at this stage are looking for early traction, strong teams, and scalable business models.

Here are 15 seed-stage startups who successfully closed funding rounds in the last month, securing capital to accelerate product development, expand teams, and scale operations. From AI infrastructure to blockchain, cloud security, and healthcare tech, these startups are tackling major industry challenges and attracting top-tier investors.

1. Positron: $23.5M for AI inference hardware

Positron is developing next-generation hardware for LLM (large language model) inference, optimizing AI performance while reducing energy consumption.

• Industry: Artificial Intelligence, Semiconductor
• Location: Reno, NV
• Lead Investors: Atreides Management, Flume Ventures, Resilience Reserve, Valor Equity Partners
• Website: positron.ai

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2. Backline AI: $9M for AI-powered security automation

Backline AI is an AI-driven platform that accelerates security workflows, automating backlog clearance and risk assessments.

• Industry: Artificial Intelligence, Cloud Security
• Location: Englewood, NJ
• Lead Investor: StageOne Ventures
• Other Investors: Evolution Equity Partners, Gradient
• Website: backline.ai

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3. Fluent Labs: $8M to advance blockchain infrastructure

Fluent Labs is a blockchain development company focused on Web3 solutions, decentralized applications, and cryptocurrency technologies.

• Industry: Blockchain, Cryptocurrency, Web3
• Location: California City, CA
• Lead Investor: Polychain
• Other Investors: Balaji Srinivasan, dao5, Nomad Capital, Symbolic Capital
• Website: fluent.xyz

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4. Affineon Health: $5M to transform healthcare inbox management

Affineon Health is an AI-powered platform that streamlines provider communication, improving efficiency and reducing administrative burdens in healthcare.

• Industry: Health Care
• Location: Denver, CO
• Lead Investor: Green Park & Golf Ventures
• Other Investors: AI Fund, Deepwater Asset Management, Signal Peak Ventures
• Website: affineon.com

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5. Presto: $15M to power next-gen EV charging

Presto is developing a software platform that enhances fleet and mobility charging experiences, optimizing accessibility and efficiency.

• Industry: Clean Tech, Mobility
• Location: Oakland, CA
• Lead Investors: Congruent Ventures, Jetstream, Powerhouse Ventures, Union Square Ventures
• Website: prestocharging.com

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6. Athenic AI: $4.3M to advance AI-driven data analytics

Athenic AI is a SaaS-based analytics platform that helps businesses solve complex data problems using AI-powered insights.

• Industry: AI, SaaS
• Location: San Francisco, CA
• Lead Investor: BMW i Ventures
• Other Investors: 10vc, Abstraction Capital, Beat Ventures, Boost VC, Scrum Ventures
• Website: athenic.com

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7. PHȲND: $10M to revolutionize cloud gaming

PHȲND is a subscription-free cloud gaming platform that lets users discover, play, and socialize across a variety of games.

• Industry: Gaming, Media
• Location: Stamford, CT
• Lead Investor: Wellington Management
• Other Investors: Bessemer Venture Partners, Connecticut Innovations, Jozy Altidore
• Website: phynd.co

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8. Keragon: $7.5M for HIPAA-compliant automation

Keragon is building a secure workflow automation platform designed for healthcare compliance, streamlining administrative processes.

• Industry: Health Tech
• Location: Boston, MA
• Lead Investor: Upfront Ventures
• Other Investors: 25madison, Afore Capital, focal
• Website: keragon.com

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9. Final Round AI: $6.88M to transform job interview prep

Final Round AI is an AI-native platform built to assist job seekers with interview coaching, resume optimization, and career preparation.

• Industry: AI, Employment
• Location: San Francisco, CA
• Lead Investors: Alumni Ventures, Uncork Capital
• Other Investors: AltaIR Capital, Goodwater Capital, Ritual Capital, Sky9 Capital, Soma Capital
• Website: finalroundai.com

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10. Trace.Space: $4M to optimize AI-powered product development

Trace.Space is an AI-powered platform for engineers building industrial products, improving requirements management and collaboration.

• Industry: AI, Product Design
• Location: Miami, FL
• Lead Investor: Cherry Ventures
• Other Investors: Change Ventures, Fiedler Capital, Nebular, Outlast Fund
• Website: trace.space

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11. Validated: $5.5M to power AI-driven performance marketing

Validated helps companies acquire users via AI-powered performance advertising solutions.

• Industry: Marketing Automation, SaaS
• Location: Seattle, WA
• Lead Investor: Canaan Partners
• Other Investors: J Ventures, Neo, Scott Banister, Steve Huffman
• Website: valid.co

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12. Mobly: $4.3M for AI-powered sales and mobile ops

Mobly is a SaaS platform that provides mobile software, data hygiene, and sales automation for businesses.

• Industry: SaaS, Mobile Apps
• Location: Lehi, UT
• Lead Investors: Eniac Ventures, Jump Capital
• Other Investors: Element Ventures, Peterson Ventures
• Website: getmobly.com

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13. Keebler Health: $6M for AI-based risk adjustment in healthcare

Keebler Health is developing an AI-powered risk adjustment tool for healthcare providers to improve billing efficiency.

• Industry: AI, Health Tech
• Location: Durham, NC
• Lead Investors: Everywhere Ventures, Freestyle Capital, Hustle Fund, Ludlow Ventures
• Website: keebler.health

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14. Self Inspection: $3M to streamline AI-powered auto inspections

Self Inspection is a provider of an AI-powered platform for the automotive inspection market.

• Industry: AI, Automotive
• Location: San Diego, CA
• Lead Investors: Costanoa Ventures, DVx Ventures
• Website: selfinspection.com

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15. Accrue: $1.58M for cross-border payments and virtual USD cards

Accrue offers financial services for cross-border payments and virtual USD cards across Africa.

• Industry: Finance, Payments
• Location: Dover, DE
• Lead Investor: Lattice Fund
• Other Investors: Distributed Capital Partners, Kraynos Capital, Maven 11 Capital
• Website: useaccrue.com

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💡 Seed funding stays strong in AI, Web3, and Health Tech

Investors continue backing AI, Web3, and healthcare startups that demonstrate early traction and scalable business models.

Looking for seed-stage investors for your startup? Capwave AI provides investor-grade pitch deck feedback, an expert-led masterclass, and AI personalized investor lists to supercharge your next raise.

Raising a pre-seed round is a massive milestone. At this stage, investors are betting on founders, market opportunity, and execution potential. Not just revenue numbers.

Here’s a list of 15 early-stage startups who recently closed their pre-seed funding round in January and February of 2025. At this stage, they’re securing capital to build, scale, and validate their vision. From AI automation to clean energy and fintech, these companies are tackling some of the biggest challenges in their industries.

Here’s a look at the startups that just raised, what they’re building, and who’s backing them.

1. Everstar: $4M for AI-powered nuclear plant management

Everstar is developing an AI-driven system to optimize the operation and management of nuclear power plants, improving safety, efficiency, and overall plant performance.

• Industry: Artificial Intelligence, Energy, Industrial Tech
• Location: New York, NY
• Lead Investor: Third Prime
• Other Investors: Excel Services, Generational Partners, Page One Ventures, Pelican Energy Partners, Virta Ventures
• Website: everstar.ai

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2. Limited: $3M to build a global self-custodial finance platform

Limited is creating a financial ecosystem that allows users to spend, save, invest, and transact globally without relying on traditional banks.

• Industry: FinTech
• Location: San Francisco, CA
• Lead Investor: Third Prime
• Other Investors: Arche Capital, The House Fund
• Website: limitedapp.com

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3. Sotira: $2M to modernize B2B logistics

Sotira is reinventing the supply chain by optimizing logistics for suppliers and buyers, helping businesses cut costs and improve efficiency.

• Industry: B2B, E-Commerce, FinTech, Logistics, SaaS
• Location: San Francisco, CA
• Lead Investors: K5 Global, Night Capital, Ritual Capital, Unusual Ventures
• Website: sotira.co

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4. Future AGI: $1.6M to accelerate AI application development

Future AGI provides a platform that helps businesses build, train, and deploy AI models faster and with greater accuracy.

• Industry: Artificial Intelligence, IT, Software
• Location: San Francisco, CA
• Lead Investors: Powerhouse Ventures, Snow Leopard Technology Ventures
• Other Investors: AngelList Quant Fund, Saka Ventures, Swadharma Source Ventures
• Website: futureagi.com

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5. Elio: $2M to coordinate and accelerate climate action

Elio is building a communication and coordination platform designed to streamline sustainability projects and climate initiatives.

• Industry: Big Data, Sustainability, Software
• Location: Dover, DE
• Lead Investor: Ananda Impact Ventures
• Other Investors: Andreas Treichl, Cerulean Ventures, N&V Capital, Overview, RHEINEST, Stefan Oschmann, We\R
• Website: elio.earth

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6. Pinkfish: $7.6M to revolutionize enterprise AI automation

Pinkfish is making enterprise automation more accessible by allowing businesses to create workflows using natural language.

• Industry: Artificial Intelligence, IT, Robotic Process Automation (RPA)
• Location: San Francisco, CA
• Lead Investor: Norwest Venture Partners
• Other Investors: Storm Ventures
• Website: pinkfish.ai

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7. Addis Energy: $4.25M to transform clean ammonia production

Addis Energy is developing innovative methods to produce clean ammonia, aiming to revolutionize energy and fuel sustainability.

• Industry: Chemical, Manufacturing, Clean Energy
• Location: Somerville, MA
• Lead Investors: Engine Ventures, Pillar VC, Voyager Ventures
• Website: addisenergy.com

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8. Systole Health: $2M to empower women’s heart health

Systole Health provides digital tools and solutions to help women take control of their heart health and prevent cardiovascular disease.

• Industry: Health Care, Medical
• Location: Allston, MA
• Lead Investor: Benchstrength
• Other Investors: J Ventures, January Ventures, Tom X Lee
• Website: systolehealth.com

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9. Gaia Dynamics: $1.5M to simplify global trade compliance

Gaia Dynamics is developing tools that help customs brokers, consultants, and brands navigate international trade with ease.

• Industry: Logistics, TradeTech
• Location: Palo Alto, CA
• Lead Investors: AI Fund, Zenda
• Website: gaiadynamics.ai

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10. Human: $7.3M for decentralized identity and fintech

Human is creating a blockchain-based identity management platform focused on financial independence and security.

• Industry: Blockchain, Consumer, FinTech
• Location: San Francisco, CA
• Investors: Hummingbird Ventures, Soma Capital, Val Vavilov, Pioneer Fund
• Website: human.org

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11. Whetstone Research: $1.3M to advance on-chain markets

Whetstone Research is building protocols that facilitate decentralized finance (DeFi) and Web3 market infrastructure.

• Industry: Blockchain, DeFi, Web3
• Location: New York, NY
• Investors: Variant, Uniswap Labs, Nascent, Figment Capital
• Website: whetstone.cc

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12. Glue: $2M to automate hardware testing

Glue is developing a software framework that automates hardware testing for industrial automation and AI-driven systems.

• Industry: Artificial Intelligence, Industrial Automation, Software
• Location: Seattle, WA
• Investors: Fortive, AIStudio Fund, PSL Ventures
• Website: gluestudio.com

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13. Incept AI: $3M to bring AI voice tech to drive-thrus

Incept AI is integrating AI-powered voice recognition into real-world applications, starting with phone orders and restaurant drive-thrus.

• Industry: Artificial Intelligence, Software
• Location: New York, NY
• Investors: Rally Ventures, 10vc
• Website: incept.ai

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14. Qumis: $2.2M to streamline insurance workflows with AI

Qumis is an AI-driven platform designed to optimize insurance knowledge management and decision-making.

• Industry: Enterprise Software, InsurTech
• Location: Chicago, IL
• Investors: Armory Square Ventures, BrokerTech Ventures, MTech Capital, Alumni Ventures
• Website: qumis.ai

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15. Taxflow: $750K to bring AI to tax and accounting firms

Taxflow is developing AI-powered agents designed to streamline tax preparation and accounting for U.S. firms, automating complex financial workflows.

• Industry: Accounting, Artificial Intelligence, Tax Preparation, Web Development
• Location: San Francisco, CA
• Investors: BFF, Brian Requarth, Brian York, Platanus
• Website: jointaxflow.ai

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More early-stage funding is flowing, but competition remains fierce

Pre-seed startups are still securing funding, but investors are more selective than ever. The startups that raised this month stood out with clear market opportunities, strong teams, and scalable visions.

If you’re gearing up for a raise, the right investor connections can make all the difference. Match with yours on Capwave.AI.

One of the most common questions founders ask is: How much should I raise? The answer isn’t as simple as picking a number. It depends on your startup’s stage, growth trajectory, and fundraising strategy. Raise too little, and you risk running out of cash before hitting critical milestones. Raise too much, and you could over-dilute your equity.

So, how do you determine the right amount? Let’s break it down with data-driven insights and strategic considerations.

1. Market benchmarks: what’s normal?

Before deciding how much to raise, it’s essential to understand what’s happening in the market. Investors assess startups based on funding trends, industry norms, and capital efficiency. The Carta US Startup Cheat Sheet H2 2024 provides up-to-date benchmarks on round sizes, valuations, and dilution trends across different funding stages. Reviewing these benchmarks can help ensure your ask aligns with market expectations.

Here’s a general guideline based on recent market data:

• Pre-Seed: $500K – $1.5M
• Seed: $2M – $5M
• Series A: $8M – $15M
• Series B: $20M+

These numbers can vary by industry and geography, but they provide a useful reference point.

2. Raising enough to hit key milestones

Investors expect each funding round to help you de-risk your startup and move closer to profitability. The amount you raise should cover the costs of achieving specific milestones that will justify a higher valuation at the next round.

Typical investor expectations by funding stage:

• Pre-Seed → Seed. Prove your MVP works, secure early customers, and validate your go-to-market strategy.
• Seed → Series A. Show meaningful traction. For SaaS, this often means $1M+ ARR or 50K+ monthly active users for consumer apps.
• Series A → Series B. Investors expect scalable growth, strong unit economics, and a repeatable sales process. Growth rates of 2-3x year-over-year are common expectations.

💡 Reverse-engineering your funding needs based on expected milestones ensures you raise enough to reach the next round without over-diluting equity.

3. The 18-24 month runway rule: how to calculate your raise

One of the golden rules of startup fundraising is ensuring your round gives you at least 18-24 months of runway.

Why this matters:

• Fundraising takes time. Most rounds take 6+ months to close, and you don’t want to raise under pressure.
• Market conditions fluctuate. Raising too soon could mean settling for less favorable terms if the market shifts.
• Growth milestones take longer than expected. Scaling a sales team or refining product-market fit often requires more time than anticipated.

How to calculate your fundraising target:

(Monthly Burn Rate × 18−24 months) + Buffer for unexpected costs

• Example: If your startup burns $100K per month and you want a 24-month runway: $100K x 24 = $2.4M
• After factoring in unexpected expenses, your target raise should be around $2.5M – $3M.

💡 Ensuring a sufficient runway prevents rushed fundraising and allows you to operate strategically.

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4. Balancing dilution vs. growth: how much equity should you give up?

While raising more capital can reduce risk, every dollar comes with dilution trade-offs.

Typical equity dilution per round:

• Seed Round: Founders typically give up 15-25% of equity.
• Series A: Another 20-25%, depending on valuation.
• Series B+: Further dilution, but often at higher valuations.

Finding the right balance:

🚩 Raise too little: You risk running out of money before reaching key milestones, making your next round harder.
🚩 Raise too much: Over-dilution can reduce your long-term ownership stake and control.

The ideal raise is one that gives you enough capital to grow without sacrificing too much equity early on.

Final thoughts

Determining how much to raise is a mix of market data, strategic planning, and financial forecasting. Make sure your raise covers 18-24 months of runway, aligns with industry benchmarks, and positions you for a successful next round. By being thoughtful and strategic, you can optimize your fundraising process and maximize your startup’s long-term success.

Need help finding the right investors? Capwave.ai can curate a list of VCs that fit your fundraising goals. Sign up today!