Seed Fund: A Necessary Hurdle for Startups

Seed Fund: A Necessary Hurdle for Startups

The seed fund means a whole lot to the innovator. Think of the funding stage as the atmosphere, water and soil needed for startups to grow. The seed fund raise is the first official money received by the startup, and usually comes in smaller amounts compare to other stages.

The seed fund has 2 key features: it is extremely necessary and also difficult to raise. Let’s talk difficult first.

Startups usually don’t know how to go about their seed fund raise. It’s not easy knowing who to receive money from and what form this money might come in. However, your business hasn’t even started making money yet, so convincing an investor poses another challenge. But it is not impossible, recent events has provided enough evidence.

Crossing the Seed Fund Hurdle

Raising the profile of your startup is very necessary. Create a huge presence around your startup and the service(s) it provides. Some of the very best ways to achieve this is by networking, gathering the likes and comments on social media platforms.

Making your startup appear attractive is not enough, you must talk about it. When an investor finds your startup attractive and asks to meet you, ensure you own the discussion. Don’t speak fate and wishes, have a plan. Draw realistic projections that analyse costs, revenues, and growth. Ya, a thorough SWOT (Strengths, Weaknesses, Opportunities, Threats) will do.

Knowing how much seed fund is needed will show a high degree to seriousness. Knowing how the funding will be used is significant, and knowing what this funding will cost your business is wise. Most investments will require equity.

Different investors ask for different returns. You must understand which is best for your business and let go of other. If you can bootstrap at the time, then you don’t need the burden of debt. If not, you should seek out angel investors or venture capital funding.

When you Should Raise

This idea doesn’t come via revelations, don’t rely on quotes as you go about seeking an investor. The founder must have a clear idea of the daily activities in his business and proper understanding of the times. As a founder, the following pointers are necessary:

  • You’ll require a Minimum Viable Product (MVP)
  • You must show that your product or idea is viable and that there is a demand for it. This could refer to money tangible evidence of consumer interest, such as user registrations or signups.
  • Key individuals should be in place in your company
  • The process of seed fundraising will involve a lot of documents and there will be contracts. To get through all this unscratched you would need legal knowledge. A lawyer by your side will do

So if you have all these running, get your pitch deck ready, get into action. This will likely culminate in an offer that gets you the required seed funding.

Importance of Seed Funds

Seed funding birth unicorns. Getting the proper raise and right investor at the seed stage sets the tone for the business. Startups can kick off a positive cycle – hire the right engineer, HRM, and Risk Manager; compete for that next 6 or 7 figure deal and meet the right firm to lead your Series A.

The most successful tech entrepreneurs will tell you that their angel investors and seed fund managers were the most essential sources of funding for their company. When it comes to starting a business, the person who says “yes” first is by far the most significant. They assist you in making your concept a reality.

Seed funds have provided necessary early support for founders. It is true that beginning a new firm and getting it off the ground is a difficult task for most entrepreneurs, and it is made even more difficult by financial restraints. However, seed funding has been getting startups off the ground before they even generate revenue. It is a necessary hurdle for innovators and tech entrepreneurs.

Next on seed fund, we’ll be discussing on the forms of seed funding. CIAO