Every entrepreneur can agree that one of the biggest challenges they had to face or are facing is getting the funding they need to get their business up and running. While some are lucky enough to bootstrap and use their own money or their friends and family’s money, others have to find other funding options for their startups.
One of the best and most common sources of startup capital is seed funding. It simply means finding investors with plenty of capital, providing them with your business proposal so that they can offer the funding you need. In exchange, these seed investors get a stake in your startup.
Companies like Uber started through seed funding, which goes to show just how lucrative this funding option can be for both parties. Here are some tips you can put to use if you wish to benefit from seed funding too:
• Evaluate whether your business really ventures scale
First, you need to determine whether your startup is venture scale. Raising funding can be tricky for some because investors are looking to find certain qualities for you to qualify. For instance, most investors put their money only on businesses that can provide ten times return. Not only this, how long it takes for your startup to rake in this amount is also a crucial factor. In other words, investors want to know how fast you can grow.
• Make sure you have a detailed and masterful business proposal
If you think that you actually venture scale, you can work on a business proposal for potential investors. You need to be able to tell them what exactly you plan on doing with their money, meaning that you need a detailed and scalable plan with your purposes clearly defined. The more they understand what your plan is, the easier it is to convince them to invest.
• Ensure you choose the right investors
It is crucial for your startup that you choose the right investors who share your vision and can provide mentorship, so you reach your goals. Choose seed funding from investors who have your best interest at heart, understand market dynamics and have plenty of experience. Of course, you have to keep in mind how involved you want them to be with your business operations.
• Don’t be fooled by the sector bias
While it is true that some fast-growing and profitable sectors such as the tech sector are favored by investors, it doesn’t mean other sectors are completely ignored. If you are truly scalable and have a solid business proposal, you have a huge chance of scoring your dream funding.