Ask HN: Raising a "super seed" round from a prominent VC
Some facts about us: - Raised angel funding 1 year ago - Still have 9 months cash runway at current expenditure - But would like to expand the team, which would significantly reduce this - Have a working simple beta version of our product available to the public - Attracting attention from VCs
We have two funding goals: either raise a small second angel round and expand the team where we are (not ideal location) or try and raise a series A and move the team to the US and expand, but we feel this is probably a bit early for us.
We've been talking to VCs and they are talking in the region of "up to $1m super seed round". This is very exciting for us, but $1m is way more than we need to expand here and probably only enough to move the team to the US, but not expand it.
There is also the issue of raising seed from VCs, Chris Dixon addressed the issue a few times: http://cdixon.org/2009/08/14/the-problem-with-taking-seed-money-from-big-vcs/
"The second nuance can be counterintuitive: the danger of taking seed money is positively correlated with the reputation of the firm. If a top VC invests in the seed round and then passes on the A, other VCs will have difficulty overlooking that the smartest money that knows the company the best isn’t following on."
One of the VCs were are talking to is very high profile, and they also seem to be the most interested. It would be a dream to have them invest, but the more I read on the subject, the more potentially harmful it sounds.
If we raised enough to expand here, it would be like the VC buying an option, with a higher chance of them not following on. Chris seems to say that > $500k is still an investment, so less of a problem, but perhaps still not enough to make the next step.
So, raise a small amount and expand here but risk them not following on, raise as much as possible from them and try to make a move to the US work on a relative shoestring, or potentially turn down a huge VC and start again when we are truly ready for series A? What are your thoughts?