What does it take to raise a seed round?

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Author

Michael Morgenstern
January 23, 2024

Happy Tuesday Brex community,

Are you a founder hoping to raise a successful seed round in the coming months? Metrics are so unique to each business and always evolving, but to stand out reaching $0-$1.5M in Annual Recurring Revenue (ARR) and showing minimum 2-3x+ growth in ARR year-over-year are crucial benchmarks. But it's not just about numbers. The ability of your team to innovate and execute efficiently with minimal resources, fortify in response to market dynamics, and sustain a clear, persuasive product vision is just as vital. Early customer engagement is key - it's about demonstrating your product's value and stickiness, coupled with a savvy strategy to amplify distribution. Remember, organic growth and a founder's direct involvement in sales are pivotal, (join for Brex founders sales training). And let's not forget, in the startup world, effective distribution often trumps having a moat. These elements together build a strong foundation for a persuasive seed round.

P.S. We're hiring a bio and healthcare startups ambassador. If you know a candidate with a strong perspective in these markets and an established founder and VC network (or maybe it is you!), email [email protected]

Growing together, Michael Morgenstern

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Startup of the Week 🤩 

Lee Rubin and Eyal Hakim, Founder and Co-Founder at Confetti.

Confetti is used by over 8,000 companies (including Brex!) to plan memorable virtual team building experiences. Their extensive catalog features 300+ ready-to-book activities designed to improve company culture and employee engagement.

Some of their most enjoyable virtual events, such as their unique Escape Quest and Mixology Classes, are best-sellers among companies like Meta, HubSpot, and Netflix. You can book them in less than 5 minutes to provide your teams with an unforgettable experience. These events are designed to infuse a lot of fun into your team-building efforts, fostering a stronger and happier workforce.

Ambassador’s perspective: The team, the team, the team – that's what it's all about! The alignment, well-being, and motivation of your employees are crucial keys to the success of your startup.

Emerging Manager Spotlight 🤩 

Esteban Reyes Founder & Managing Partner at Zenda Capital

Zenda Capital is an early-stage venture fund that backs software companies that are transforming how money, goods, and information flow across the economy. Premised on the belief that every company, particularly in underserved sectors, will be a tech or tech-enabled company, Zenda is investing into B2B fintech, supply chain & logistics and vertical software across the US and LATAM.

Esteban began his journey as a fintech entrepreneur, where he sold fraud prevention software and APIs to 400+ banks in the U.S., leading to an exit to NYSE: LPS/Black Knight in 2009. He then went on to incubate 8 companies across underserved industries from education to B2B wholesale, where he saw 3 successful exits. The rest of the team bring over decades of operational expertise building and scaling infrastructure and data products, having led product and GTM teams at Twilio that took the company through its IPO. As the 2nd-largest LP in their own fund, they write checks between $500K to $1.5M at the pre-seed/seed stage. The investment team is based in Miami.

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