What is seed Funding ? Angel investors ,Venture capitalist | 20 Tips for raising seed funding

Seed funding for startup

What is seed Funding ?  There’s always a need of money for starting or doing start-up in any field of marketing. But starting a company has been a dream of many. And it also needs money or we can say seed funding.

What is seed funding? Why do we need it?

Seed funding refers to the investors, investing capital in a start-up company in exchange for an equity stake in the company.

We need these kinds of seed funding because a person can not hold the investment alone in start-up. He/she always wish to have someone beside with whose help he/she can invest or expect to have funding in company.

Before we go for seed funding and its introduction that how to make money. We should deal with some basic things it includes.

Most of us have various business ideas in their mind but many of them do not have enough amount or fund to invest on their business.

Business funding for start-up, Ways to get seed Funding:

Here, we will discuss about how we can collect money or do funding. From where we can get the investor? What is best, either taking loan from the bank or taking help from private investors??

Investors can be anyone who helps you through money in investing your business:

What is seed funding

 

  1. First, Family and friends.
  2. Second, Bank (through loan).
  3. Third, investor.
  4. Fourth, Venture capitalist.
  5. Fifth, A big businessman.

Therefore, Investing have been a big part of seed funding because investor is a person who provides funds with the expectations of future finance return. Investor invests the fund for the company.

Further, officially there are only two kinds of investors:

  1. Angel investors:

    They are big businessman where CEO’s of big companies trust your business ideas and provides funds. Additionally, they also help you in guiding and improving your business model & hence, make you a big player in the market.

  2. Venture capitalist:

    They are the investors who provident you the funds but don’t provide business. They don’t help you in finding loopholes in your business model & improving them.

Also, they take money from big companies &investment it in your business. Similarly, to share market brokers. Venture capitalists can be defined as a shareholder of your new business.

20 Tips for Raising seed funding:

  1. First realize you’re not at a seed stage, as you don’t have a product. It’s more like pre-seed.
  2. What are you even building that you need money?
  3. Once you build it, get people to use it.
  4. Then figure out how you gonna get more users.
  5. Create a deck of the awesome growth rate and send it across.
  6. If no growth, then try again.
  7. If you are absolutely certain of the plan – to create value and thereby, give an honest assurance (not guarantee) that there is a reasonable chance of the money growing, then talk to angel investors and institutional investors (VCs, Banks etc).
  8. If you are only half sure, then ask friends and family – they might be willing to take a 50:50 chance on the money never coming back but if they know you, they might be willing to take a bet.
  9. Show Me Why the Team Is Uniquely Qualified
  10. Sell your vision
  11. Make sure you have a great 15-20 page investor pitch deck describing your startup.
  12. Consider posting your startup on Angel List, where angel investors reside and consider investment opportunities.
  13. Consider raising funds through crowd funding sites such as Kickstarteror Indiegogo.
  14. Leverage ypur customer
  15. Show Why You Care
  16. Define the Problem You Are Solving
  17. The creation of a beta or minimally viable product
  18. Strategic partnerships
  19. Customer testimonials
  20. Admission into competitive programs such as Y Combinator or other technology accelerators or incubators

 

 

Also Read: How to start a Business in 2020 | Online & Retail Startup Strategies

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