What to call your funding round?
Understand which funding stage fits your startup and what it signals to investors
A Practical Guide for UAE & MENA Startup Founders
One of the first questions founders ask when preparing to raise capital is: "What do I call this round?"
The answer isn’t always straightforward — especially in the UAE and MENA region, where funding landscapes have evolved quickly. The terminology you choose shapes how investors perceive your startup, and it sets expectations for traction, valuation, documentation, and governance.
Here’s a breakdown of the key funding stages — with region-specific norms, legal considerations, and tips.
The answer isn’t always straightforward — especially in the UAE and MENA region, where funding landscapes have evolved quickly. The terminology you choose shapes how investors perceive your startup, and it sets expectations for traction, valuation, documentation, and governance.
Here’s a breakdown of the key funding stages — with region-specific norms, legal considerations, and tips.
Friends and Family
- Product: Idea or prototype
- Amount: Typically under $100,000
- Post-Money Valuation: Commonly below $1 million
- Instrument: SAFE or Convertible Note
- Investors: Personal Network
This is often the very first funding a founder receives. Money comes from personal relationships — family, friends, or former colleagues. The startup might only have a pitch deck or rough prototype. In the UAE, this round can sometimes be larger than in other MENA countries, but remains informal in structure.
Founder Tip
Avoid relying solely on trust. Even if you're raising from close contacts, use a basic agreement like a SAFE or Convertible Note to document the investment.
Pre-Seed
- Product: MVP or early user testing
- Amount: $ 50,000 to $ 500,000
- Post-Money Valuation: $ 1-$ 3 million
- Instrument: SAFE or Convertible Note
- Investors: Angel Investors, accelerators
At Pre-Seed, the product is in development or just being tested in-market. Funding is used to continue building, hire early team members, or refine the business model. Investors include angels, small funds, or accelerator programs. UAE startups may raise higher Pre-Seed rounds due to more available capital and government-backed support programs.
Legal Insight: Most Pre-Seed investors do not require a fixed valuation. SAFEs remain a popular and efficient option across the region.
Seed
- Product: Launched with traction
- Amount: $500,000 to $2 million
- Post-Money Valuation: $5 million to $15 million
- Instrument: Priced equity or SAFE
- Investors: Angel syndicates, early-stage venture capital
This is the first serious round where institutional investors often come in. Founders are expected to show market validation — revenue, users, or other traction metrics. Equity financing is common, though SAFEs are still used in smaller or faster deals.
In the Middle East, unless the company is structured under a Delaware holding entity, the legal documentation at the Seed stage typically follows the BVCA (British Venture Capital Association) framework. This includes a subscription agreement, a shareholders' agreement, and either articles of association or a memorandum and articles of association, depending on the jurisdiction. Investors may request board rights, information rights, and liquidation preferences.
In the Middle East, unless the company is structured under a Delaware holding entity, the legal documentation at the Seed stage typically follows the BVCA (British Venture Capital Association) framework. This includes a subscription agreement, a shareholders' agreement, and either articles of association or a memorandum and articles of association, depending on the jurisdiction. Investors may request board rights, information rights, and liquidation preferences.
Series A
- Product: Proven product-market fit
- Amount: $2 million to $10 million+
- Post-Money Valuation: $20 million to $50 million+
- Instrument: Priced equity (Preferred Shares)
- Investors: Institutional VCs, corporate funds
By this stage, startups are expected to have validated their business model and are ready to scale. Series A funding is typically used for regional expansion, hiring leadership, and accelerating go-to-market strategies.
Investors often require extensive due diligence, formal corporate governance, and a well-defined reporting structure.
Investors often require extensive due diligence, formal corporate governance, and a well-defined reporting structure.
Don’t obsess over naming
There’s no universal rulebook — but there are patterns. Each round name signals a level of maturity, traction, and readiness to investors. The structure and expectations may differ slightly across UAE and MENA, but the trajectory is becoming increasingly standardized.
Founder Reminder
Don’t obsess over naming. Focus on transparency, traction, and clean structure. The right investors will follow.
This guide is part of the Seed&Scale Knowledge Bank — your source for practical, founder-focused legal content. Let us know if you’d like templates or guidance to prepare for your next round.
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