TinySeed Raises $25 Million to Kickstart Investment in SaaS Startup Companies

By Elijah Labby Wednesday, March 17, 2021

TinySeed is a company that provides support funding for very early-stage SaaS (software as a service) companies, and it’s raised $25 million in funding to continue its mission.

TinySeed believes that not every company needs to be a unicorn (one of the few startup companies that ends up reaching a billion-dollar valuation) to be successful or to make a return on investment. To that end, the company provides a yearlong remote guidance and mentorship program that aims to create profitable SaaS companies out of young startups.

Tracy Osborn, the program director at TinySeed, explained that unless a SaaS company is making significant revenue, it can have a hard time going after venture funding firms interested in such businesses easily.

“A lot of companies fall into this realm,” Osborn told Crunchbase. “They are successful companies not recognized by VCs. We are trying to fill that gap of really early-stage investment.”

A plant growing from a stack of coins.

A Look at the Financials for Startup Businesses in the Industry

It’s a profitable market, by the way. The market for SaaS businesses of the type that TinySeed is looking for was expected to reach $157 billion in size in 2020 — that’s more than double its value in 2014, according to market research firm Statista.

Rob Walling, the founder of TinySeed, believes his company is helping SaaS startup businesses take advantage of a more collaborative, less dog-eat-dog approach to startup funding.

Creating “Sane Startup” SaaS Businesses

“We believe that designing a funding structure that fairly aligns founders and investors in this way will mean a lot more capital will flow into this ecosystem and hence allow many more businesses like this to be built,” Walking said in an interview with Hacker Noon.

“This also means they can grow at a healthier pace and don’t need to force growth to raise their next funding round. I like to think of this as building a sane startup,” he said. “That is, a startup that values people over results, has reasonable working hours, provides ample days away from the office, and generally doesn’t burn out the people involved.”

A sane startup sounds pretty good, and TinySeed has thus far found quite a few of them. In its two rounds of funding, titled the 2019 and 2020 cohorts, TinySeed helped companies like BlueRithm, Builder Prime, CodeSubmit, Branch, Castos, ClientRock, and more than a dozen others.

Recommendations from the Startup Businesses

These SaaS startup businesses seem to believe in TinySeed’s vision, if Ruben Gamez of Docsketch is any indication.

“When I was considering taking funding from TinySeed one of the biggest areas of concern was that I’d suddenly feel extra pressure and stress from having investors,” he said. “Instead, the combination of having extra resources and the TinySeed support network (while keeping the flexibility of bootstrapping) has felt like a weight off my shoulders.”

About the Author

Headshot of Elijah Labby

Elijah Labby is a graduate of the National Journalism Center. He has previously written for Broadband Breakfast, a technology and internet policy website.

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