Series A Needs to Change

I’ve been in Silicon Valley for almost 20 years and during that time the Series A round has barely changed. It takes months of work and meetings, the process is almost entirely opaque, you need to find warm introductions, and you’re usually expected to give up at least 20% of your company. Plus, after all that, you have to pay the VC’s legal fees!

The only things that have changed are the round sizes, how much is done over video vs in-person and now there are a few standardized term sheets, e.g. Y-Combinator and the NVCA. For a community that claims to invent the future, we are sorely lacking innovation here.

Thankfully, this week we saw someone finally offering fresh ideas. Having been long term partners at YC, Paul Bucheit and Dalton Caldwell are bringing that ethos to the Series A with Standard Capital. The list of changes is significant:

• Apply online — You don’t need an introduction
• 10% dilution — You don’t have give up a huge chunk of your company
• Pay their own legal — You don’t have to pay the VCs legal fees once the round is closed.
• Peer groups instead of Board Meetings — You don’t have to listen to someone trying to sound knowledgeable about your business

I expect the very best founders will prefer this approach and hopefully that will force change across the market. Series A is about to change and it’s long overdue.

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