Greg had been raising for nine months.

When we met, he'd already raised a $150K friends-and-family round to get his wearable prototype working.

The device was designed to be used by clinicians at the patient bedside and had promising early data and one academic center already asking for pilot units.

Now he needed to raise $3M.

The plan was clean on paper: Finalize the prototype, run a small animal study, bring on a part-time regulatory consultant to map the 510(k) pathway and draft the pre-submission package. 15 months of runway to a real clinical validation study, which would position him to raise the Series A.

This seemed sensible. Except almost a year into it, no one was coming into the round.

At first, Greg set his sights on where he had prior success - with the F&F network. But he quickly found that a $3M round was well beyond what investors writing $10K checks could support. That would mean kissing a lot of frogs.

In a bit of good fortune, he was introduced to several high net-worth individuals who were willing to put in $250K - but only once Greg found a “credible lead.”

So Greg approached funds who self-identified as “pre-seed”, “seed” and “first money in” on their LinkedIn and website.

But after a few conversations it was clear that they had very different definitions of what a pre-seed company looked like, how much it should raise, and for what milestones.

Not only did their definitions differ from what Greg expected, or from what he heard from friends & family and high net-worth individuals, they differed from each other - even though they were all “institutional capital”.

Not sure where to lean in the most, Greg built two version of his deck - one for smaller check angels, and one for VC funds. One deck targeted $800K for the most vital work. The other was for $3M to go the full distance.

As a result, Greg’s weeks were spent balancing two decks, two narratives, and sometimes two fundamentally different identities as a founder.

That was on top of part time work as an Associate Professor and actually building a product and a company from scratch.

Does this sound familiar?

It's not just you, and it’s not just Greg. The challenge is structural.

The harsh reality is that the average biotech seed round takes 9+ months to close and 1 in 5 founders run out of runway before closing.

This isn't new. There are three fundamental reasons, which should feel familiar to anyone who's raising in Biotech now:

But there's also a fourth reason most founders miss. And most often, it's harder to see from inside your own raise.

Here is what the data looks like.

DealForma tracks average round sizes in biopharma therapeutics and platforms. In 2017, the average seed round in biotech was $2.8M. By 2024, it had grown to $12.1M. Based on the latest data for Q3 2025, it was pacing $17M. That's a 4.3x increase in seven years.

And Series A? The average round has grown from $26M in 2017 to $72.7M in 2024; a 2.8x increase.

Interestingly, seed grew faster than Series A in proportional terms. But the absolute gap between them kept widening: $23M in 2017, $60M by 2024.

That is the literal “valley of death” most of us have been living through over the past several years.

To put this in plain terms: the average Series A in 2017 was $26M. The average seed in 2025 YTD is $17M. What gets called a seed today in biotech would have been a Series A just several years ago.

And this isn't hypothetical. Named, public rounds now carry labels that don't match traditional stage definitions:

Outside biotech, the drift goes further still. Thinking Machines Lab, Mira Murati's AI company, reportedly raised $2B in a round that was still labeled a seed.

Fun times 🙂

For pre-seed specifically, the problem isn't just that definitions drifted. It's that a single label is now being used for two entirely different kinds of raises.

In late March 2026, Carta published an analysis of pre-seed funding based on their platform data. Their finding: the pre-seed market used to look like a bell curve, with most rounds clustered around a typical size, with a few outliers on either end.

That's no longer the shape. Today's pre-seed market looks like a barbell. The small end is growing. The large end is growing. The middle is disappearing.

A few specifics from their data across multiple industries:

The two ends of the barbell don’t just differ in dollar amounts. These are entirely different markets.

The lower end is almost always friends, family, and founder networks - checks written from people you may already know personally.

The large end is typically institutional - funds and family offices running real diligence, often on priced terms. These two groups don't share notes, terms, or expectations.

Within biotech specifically, the split is even sharper. Carta's biotech/pharma data shows:

That's a 55x spread in round size - all under a single label.

Greg's $3M wearable raise is exactly where this catches founders. Too big for the small end of the barbell. Too early for the large end. Stuck right in the middle, where most of the deals used to get done before the tide went out.

If the labels have drifted this much, and investors themselves disagree on what they mean, then chasing the “right” label is no longer the strategy.

The strategy is upstream of the label conversation entirely.

Most founders start by picking a label: Pre-seed, seed, bridge, seed extension, Series A, pre-pre-seed (yes, really).

They pick the name, then try to back into a raise that fits it. This is backwards.

The founders I’ve watched run a well-executed raise do the opposite. They treat the label as the last thing to figure out, not the first.

Here’s how.

Before you think about how much to raise, answer one question: what is the single most valuable thing this capital needs to derisk?

This is not three things; it’s not a project plan. It’s one clear inflection point that is part of the company’s growth trajectory.

For Greg, it was getting to a 510(k) pre-submission. Everything else - the product design, the small animal study, was in service of that.

For a therapeutics founder, it might be lead optimization delivering a development candidate that meets the target product profile. For another, it could be the first three patients dosed in Phase 1a.

Whatever it is for you, the test is the same.

Write it in one sentence. If you can't, you don't have a milestone, you have a wish list. Keep cutting until it's one thing.

Now figure out what that milestone actually costs.

As much as possible, build this bottoms up: Add personnel, CRO and lab costs, IP, Regulatory, G&A.

Then take that total and add a 30% buffer for the things you haven't thought of yet.

Building on that amount, now add another buffer to make sure you have 18–24 months of total runway from close, which means enough to hit the milestone and 6–9 months on top of it to raise the next round from a point of strength.

From my experience, this is far from a trivial exercise. Make sure you take time to really think through this - the final number may surprise you.

Sometimes it's higher than you thought, and now you need to have an honest conversation about whether the milestone is right-sized. Sometimes it's lower, and you were about to over-raise and take unnecessary dilution.

Either way, you need the number before you go any further.

You now have two internal data points: your milestone and your capital need. The next step is to look outside.

Two things to check:

First, comparable companies. Find 5-10 biotech companies that raised money in the last 12–18 months at roughly the development stage you're at now. What did they raise? From whom? What did they call it? Press releases and LinkedIn announcements do most of the work here, and a focused afternoon will get you further than most founders realize.

Here, you're looking for patterns, not exact matches. If five comparable companies raised $6-10M from specialist seed funds and called it a seed, you have a strong signal.

Second, milestone benchmarks by stage. This is a rough guide, not a rulebook, but it gives you a useful calibration check. For instance, for therapeutics founders this may look something like:

Medtech, diagnostics, and tools companies have their own variants of this ladder. The specifics shift, but the principle stays the same: each stage has a rough milestone signature, and for the most part, the markets reference it.

Between what comparable companies are raising and what your milestone actually is, you should be able to place yourself reasonably well.

With Steps 1 through 3 done, you have enough to name the round.

Most of the time, the label falls out naturally, and sometimes, not in the direction you expected. Maybe what you were calling a pre-seed is actually a seed once you price the milestone honestly. Maybe what you thought was a seed is actually two rounds - a pre-seed now, and a proper seed later. And that’s OK - these are private markets, after all.

With that being said, a few considerations before you commit:

If the amount feels too large for the stage you're actually at, pressure-test your assumptions. Sometimes the answer is a tighter milestone, not a bigger raise. A smaller, crisper inflection point costs less, matches a cleaner label, and often raises faster. Revisiting Step 1 with fresh eyes is often helpful.

Consider non-dilutive capital as part of the picture. Grants, strategic partnerships, and early pilot revenue can close part of the gap without taking equity. This lets you target a smaller equity raise at a cleaner stage label and keeps more of the company in your hands when the Series A conversation happens.

Consider tranching the raise. Instead of a single $4M close, you may be able to structure it as $1.5M now and $2.5M in six months, tied to a specific milestone unlock. This keeps dilution measured, creates natural momentum, and often matches how certain investors prefer to deploy capital.

And as always, talk this through with your trusted advisors. Your lawyer, your accountant, a board member who's seen a lot of rounds, a founder friend two stages ahead of you. This framework is a starting point, but your specific situation has context that no general guide can capture.

Now, and only now, do you identify who actually writes the check.

Which of the five archetypes has the mandate, check size, and thesis overlap at your number: angels, angel groups, family offices, micro-VCs, or established VC firms?

Angels and angel groups typically play at the lower end. Micro funds and emerging managers typically reside in the middle. Family offices can play across the range, especially with mission alignment. Established VCs come in at bigger checks with bigger return expectations.

Remember, at the lower end, you're pitching to friends, family, and angels who care about the story and human impact. At the higher end, you're pitching to institutional capital that runs real diligence and likely underwrites the next round.

These are not the same audience and they are not interchangeable.

This is where Greg's raise broke down.

He had a real milestone. He had a reasonable capital need. But he skipped the pressure-test and jumped straight to outreach - pitching angels writing $10K checks and institutional funds at the same time, with two different decks, two different narratives, and nine months of mounting fatigue.

If he'd worked these steps in order, he would have landed on a specific label, a specific raise size, and one clear archetype to focus on.

His $3M raise wasn't going to come from angels stitched together, and it wasn't going to come from a mega-fund. It was going to come from a small number of specialist seed funds and maybe one or two family offices.

That’s an entirely different type of fundraise.

Here are a few resources that were particularly useful while I was researching this issue. Each one is rich with market data, and worth reading in full if you're actively thinking through these questions for your own fundraise.

→ Carta's “The Disappearing Middle”. The source of the barbell framing. A short, sharp read on how pre-seed has bifurcated into two separate financing realities sharing one label.

→ Carta's State of Pre-Seed, Q3 2025. A comprehensive report on pre-seed funding levels, with the biotech/pharma-specific pre-seed chart I referenced. Note: you may need to enter your email to unlock access to the full report, I highly recommend it.

→ J.P. Morgan's Q4 2025 Biopharma Licensing and Venture Report. The clearest single view of where biopharma capital actually went in 2025 - including median venture round sizes by stage (Platform, Preclinical, Phase I, II, III), where licensing deals are concentrating, and how the early-stage vs. late-stage gap keeps widening.

→ Kaleidoscope's “Biotech Milestones for Effective Fundraising”. Four biotech VCs on what they actually look for at each stage. Great insights from partners at KdT, Hummingbird, Dimension, and Cantos as they speak candidly about what “seed” and “Series A” mean to them in practice.

Here’s what I’d like to leave you with today: the label isn’t the problem.

The problem is treating a label as an input, when it’s actually an output.

If you've been stuck in a raise that won't close, or arguing with investors about what to call the round, or running two different decks for two different audiences - the work is upstream of all of that.

Write your milestone in one sentence, back into the money, and pressure-test against the market. Then let the label land and match it to the investor archetypes who actually write checks in that range.

If you’re raising, or about to be, here’s what I would do this week: take 90 minutes, block your calendar, and run through steps 1 and 2 of the Framework. Write the one-sentence milestone, add up the cost line-items, and add the buffer.

Look at the number.

If it surprises you, that's a signal that you've been working with the wrong inputs, or perhaps the wrong milestones. Fix those before you fix anything else.

The round name should feel more like semantics after that and less like an identity.

Reply and tell me how it goes. I’d love to hear about it.

See you next Sunday!

- Vadim

PS: Every biotech founder has at least one friend currently arguing with themselves about whether they're pre-seed or seed. You probably know who yours is. Forward this to them, or send them to biofounder.io so they don’t have to go it alone 🙂