"No Man's Land" is traditionally known as the area between two trenches. This is a reference to World War I and the vicious trench warfare and hand-to-hand combat that characterized that war. In "No Man's Land" lay a wasteland of dead bodies and other debris and shrapnel. Increasingly I am seeing many startups who were ably seed funded get caught in "No Man's Land" between the seed round and a true Series A round led by a venture capitalist.
This is happening because there are way too many companies raising seed capital but not enough executing their way to a Series A. This can happen for many reasons including not raising enough capital in the seed round to begin with and of course not getting your product out the door. So what does an entrepreneur do when caught in this predicament? Many try to do an additional seed round or add-on to the prior round. While not a bad idea, this is rarely successful because many seed funded startups have way too many investors who are more apt to write off the investment then to bridge more seed money. Secondly many angel investors would rather invest in that shiny new car or first seed round then add more capital to a used car or startup that did not "get there" on its first seed financing. Smarter entrepreneurs are increasingly doing two things to make sure they don't caught in "No Man's Land." First, rather than getting 20 great names as seed investors, they are making sure to get at least 3/4 or more of the round invested by a couple institutional seed folks that may have deeper pockets and more ownership in the startup to really care about what happens in the future. Secondly, the smarter entrepreneurs are really thinking carefully about what milestones need to be hit to raise that first Series A round and work backwards to determine how much financing they need to get there. While not an exact science, it is imperative to think like this as you don't want to be one of the many seed-funded companies that will linger in "No Man's Land."