The Pulse Fundraising Strategy -- "Seed Round without Angels" -- pays off.
Adam Rifkin stashed this in Silicon Valley!
Last fall, Pulse did something fairly unprecedented and quite clever: they raised an Angel round of financing without having any Angel investors.
Call it the "Seed Round without Angels" Strategy: Alphonso Labs raised $1 million in convertible notes with no cap from four venture capital firms (Redpoint, Greycroft, Mayfield, and Lightspeed) and no angels.
Fast forward to June 2011. Alphonso Labs has raised $9 million in Series A investment from one of those four venture capital firms (Greycroft) as well as two new firms (NEA and Lerer Ventures).
We at 106 Miles don't usually applaud funding -- it's far more important to applaud the things that most matter in a startup, specifically customers/users and revenues -- but in this case we applaud Alphonso Labs for demonstrating a successful and novel funding strategy.
We wouldn't be surprised to see more startups take this approach to funding in the future.
Robgo has an interesting post about the ideal Seed Round composition.
He suggests several models: one VC lead, two VC leads, angel round led by Micro VC or Seed Fund, individual angels only, or Large VC-led chip-in.
Among that taxonomy, what Alphonso Labs did is closest to the Large VC-led chip-in. Rob says that of all the scenarios, this is the trickiest and most idiosyncratic.
I want to know how to do this.
It's pretty much the same process: you talk with lots of potential investors, only in this case you focus less on AngelList and more on VC's who invest in seed rounds.
Or was there more to your question I can speak to?