Popular Categories$show=/search/label/Labels


15 Expert Tips for Startups Seeking Angel or Seed Financing

By Richard Harroch, AllBusiness.com

Very early stage startups often seek angel or seed financing in order to gain initial traction on developing their product or technology, land initial customers, and make other progress. Angel or seed rounds typically range from $100,000 to $500,000 or more.

I have been an angel, seed, and venture capital investor in a number of technology companies. For me, there are always four key points I look for when reviewing an early stage seed or angel investment opportunity:

Has the Entrepreneur Been Referred to Me by a Trusted Colleague?

I get inundated with unsolicited executive summaries and pitch decks. Most of the time, I ignore these solicitations. The way to capture my attention is to get a warm introduction from someone I know and trust: an entrepreneur, a lawyer, an investment banker, an angel investor, or another venture capitalist.

Is There a Great Management Team in Place?

Many investors consider the team behind a startup more important than its business idea or product. I want to know that the management team has the right set of skills and has the drive, experience, and temperament to grow the business. Investors want to see a group that has all of this along with an obvious passion to do something truly great and unique.

Is the Market Opportunity Big Enough?

Most investors are looking for businesses that can scale and become successful, so make sure you spell out clearly why you believe your business has the potential to become really big. Don’t present small ideas. If your first product or service is small, perhaps you need to position your company as a “platform” business that will allow for the creation of multiple products over time. Investors want to know the actual addressable market and what percentage of it you plan to obtain over time.

For most investors, a “big” market opportunity is in excess of $1 billion in sales annually.

Has the Company Achieved Some Early Traction?

I don’t typically want to invest in an “idea”; I want to see early traction or customers. A company that has gotten some early traction is more likely to obtain financing and have a higher valuation.

Examples of early traction can include the following:

The creation of a beta or minimally viable product Initial or pilot customers, especially brand-name customers Strategic partnerships Customer testimonials Admission into competitive programs such as Y Combinator or other technology accelerators or incubators

I asked a number of other early stage investors their tips for obtaining startup financing. Here’s the real-world advice they had to offer:

Show Me Your Dedication and Passion

“We want to see dedication and perseverance in founders, and that they are passionate about the business and will have the desire and ability to get through difficult times. Startups are hard, and an entrepreneur needs to understand that the roadblocks that they likely will encounter must be tackled. Of course, I care about the market opportunity and the technology, but I care more about working with a great dedicated founder who wants to build a great company.” —Melissa Guzy, Managing Partner of Arbor Ventures (investment focus on early stage financial technology companies)

Define the Problem You Are Solving

“Good entrepreneurs begin their pitch with a well-articulated problem statement. This helps validate that they are building a product that customers need and are willing to pay for (it also validates that they know who their customers are). The problem should be a big pain point that is not addressed adequately by existing companies. This is, of course, followed by “The Solution,” which introduces the entrepreneur’s approach to the problem and explains why they specifically are best positioned to solve it in a way that has widespread appeal for customers.” —Ellen Herlacher, Director, Tufts Health Ventures (investment focus on early to mid-stage healthcare services and healthcare IT companies)

Founder Intangibles

“At the early stage, I typically look for certain attributes in a founder. One essential and often overlooked skill is storytelling, the uncanny ability to craft a compelling narrative on why you are building something unique. Storytelling serves as a wonderful proxy for many elements of company-building: it is great indicator of how you will sell your vision to customers, partners, recruits, investors, and ultimately an acquirer. It is also critical for founders to convey this narrative with utter conviction and authenticity; ideally, they have experienced firsthand the pain of the problem they are trying to solve. At the same time, I like founders who are coachable, as collaboration and alignment with investors is so important. Finally, it’s crucial to be flexible, iterate quickly, and make decisions fast—decision fatigue can paralyze company-building.” —Patrick Eggen, General Partner, Counterpart Ventures (investment focus on early and mid-stage SaaS, B2B marketplace, and mobility companies)

Show Me Customer Interest

“As a four-time entrepreneur, I spent well over a decade struggling through the brutality of building companies. During those years it became massively apparent to me that the only thing that matters in a startup is the delta between your product and the other solutions to market. That’s it. I like to say that you haven’t found product fit until you can cold call a customer, on their cell phone, at nine o’clock at night, as they are putting their kid to bed, and describe what you do in one sentence, and then have them take the call. That may seem like an impossibly high bar, but startups are impossibly hard and unless you have that, your chances of success are very low. The fastest way to get me to write a check is to be able to tell a story about that delta. Ideas are meaningless; validated ideas are priceless.” —Zach Coelius, Managing Partner, Coelius Ventures (investment focus on early stage technology entrepreneurs) 

Show Why You Care

“We want to hear why you care about the problem you are trying to solve. The desire to solve a problem you have encountered firsthand is a strong motivation for entrepreneurship. Did your battle with depression move you to build a mental health platform? Did your frustrations as a public servant push you to build a SaaS solution for government? These stories are part of your personal narrative; include them and your passion will shine through in your pitch. How did you come to discover the problem you are building a solution to? Why are you the right founder to solve this problem? We hear a lot about product-market fit, but at the very early stages, founder-market fit is just as important. Your product will dramatically change, but the founding team’s motivation is likely to remain a constant.” —May Samali, Venture Partner, NextGen Venture Partners (investment focus on early stage U.S.-based technology companies across all industry verticals)

Leverage Your Customers

“One of the lesser-known secrets to fundraising is to leverage your own happy customers. If you’re in a business that sells to other startups, you may find that some of your customers are venture-funded themselves. A quick search on Crunchbase will help you identify all of the key investors that have funded your customers. If they’re happy with your service, they may be willing to introduce you to their own investors, and these intros carry a lot of weight because they are from a highly trusted source.” —Josh Breinlinger, Managing Partner, Jackson Square Ventures (investment focus on early stage SaaS and marketplace investments)  

Tell Me What You Don’t Know

“So many unknowns remain at the angel and seed stages, so be upfront about that. Tell me what you have proven so far, and then what you want to prove next and why. Founders who present clear thinking about what they want to prove out with the funding they receive demonstrate a much greater level of understanding of the risks involved in the business they envision. It doesn’t matter if the future unfolds differently—in fact, it’s likely to!” —Jennifer Savage, Partner, Illuminate Ventures (investment focus on seed stage enterprise software / SaaS applications)

Hyperscale It!

“We have shifted from the Lean Startup to the Hyperscale Startup as the money has flowed into venture capital. Even Steve Blank, who popularized Lean, agrees: if you can, go for Hyperscale. The art is to know how to Hyperscale. Figure out the product/service at small scale, get the details right, hire ‘been there/done that execs,’ then go big when you know how to spend the big bucks wisely. It may start as a lean company, and usually should in order to figure it all out first; but once everything clicks and you know the playbook, raise big and go big.” —Duncan Davidson, Founding Partner, Bullpen Capital (investment focus on growth seed technology companies) 

Show Me Why the Team Is Uniquely Qualified

“At the very earliest stages of a startup’s life, people are by far the most important ingredient of success. With every meeting I’m asking myself two things: why is this team uniquely qualified to solve this problem, and why am I uniquely qualified to be an investor in this company? When you have a uniquely qualified team solving a problem, the team has a competitive advantage at the early stages of the business, and this can help fend off fast followers. I view early stage investors as early employees; they need to be grinding it out on the recruiting, customer, fundraising, and partnership fronts alongside the management team. Sometimes that can be with a few early customers and partners, or a few C-level hires for the business. If I can’t tell myself a compelling story there, I assume adverse selection and move on because presumably the team is also doing that same calculation.” —Michael Gilroy, Partner at Canaan Partners (investment focus on seed through Series B rounds in enterprise software and fintech companies)

Sell Your Vision

“As a founder, your job is to be a resource magnet, attracting capital, customers, and employees. This ultimately requires learning how to masterfully win hearts and minds by selling your vision. When you attempt to attract capital and pitch to investors, be provocative—tell the story so your company’s solution is dead center and inevitable. Too often entrepreneurs have all the details but no ‘holy crap’ moment. 10x your idea to as big as its potential, and then ground it in details. It’s about being a pragmatist while also showing you’ve got some Steve Jobs magic.” —Kira Noodleman, Investor at Bee Partners (investment focus on emerging frontier technologies, including the commercialization of blockchain, synthetic biology, and opportunities in space that harness the power of the data supply chain, interoperability needs, and platform applications)

Here are some final tips to consider:

Make sure you have a great 15-20 page investor pitch deck describing your startup. See How To Create a Great Investor Pitch Deck for Startups Seeking Capital. Consider posting your startup on AngelList, where angel investors reside and consider investment opportunities. Consider raising funds through crowdfunding sites such as Kickstarter or Indiegogo.


|Featured Content_$type=three$c=6$l=0$m=0$s=hide$rm=0

Made with in NYC

4th of July,7,Abu Dhabi,2,Accessories,234,Acne,13,Adventure,32,Adventure Travel,638,Advice,295,Africa,26,African Food,2,AIDS,1,Air Travel,150,Alabama,5,Alaska,20,Alberta,1,Alcohol,4,All About Beer,1,All About Wine,2,Alternative Treatments,4,America,77,American Food,5,Amsterdam,2,Android,11,Anguilla,3,Animal,367,Animal Health,1,Animals,103,Anniversary,1,Anniversary Cake,11,Antarctica,7,Anti-aging,49,Antigua,3,Appetizers & Snacks,2,Apple,11,Apps,16,Argentina,15,Arizona,19,Arkansas,2,Armenia,1,Asia Travel,47,Asian Food,7,Asthma,4,Athens,3,Austin,8,Australia,92,Australian Food,1,Austria,13,Autism,1,Auto Insurance,1,Auto Show,52,Autos,46,Azerbaijan,1,Baby Shower Cake,29,Back Pain,25,Bags,10,Bahamas,14,Balance Work & Life,50,Banana Cakes,2,Bangladesh,8,Barn Finds,1,Bathroom,43,Be a Better Manager,33,Beach Travel,58,Beaded Dress,2,Beards and Shaving,29,Beauty,1888,Beauty & Style,35,Beef Recipes,8,Belarus,1,Belgium,9,Belize,15,Bermuda,5,Best Products,17,Better Partner,40,Beverages,3,Bhutan,9,Bills to Pay,35,Birds,4,Birth Control,1,Birthday Cake,109,Blue Lagoon,2,Blueberry Cake,11,Body & Mind,6,Bolivia,3,Botswana,3,Brazil,38,Bread,11,Breads,1,Break Room,12,Breakfast & Brunch,6,Breakup,19,Breakups,3,breast,1,Breasts,69,Broken Hearts,5,Brownie,8,Brunei,1,Budget Travel,97,Bundt Cake,30,Business Skills,103,Butter Cake,52,Buying,1,By Region,3,Cake Decorating,113,Cakes,54,California,109,Cambodia,4,Camera,6,Canada,80,Cancer,73,Car Shows,1,Car Tech,2,Caramel Cake,5,Career,232,Career Advice,298,Career Choice,125,Career Growth,180,Career Paths,24,Career Problem,8,Caribbean,45,Caribbean & Mexico,5,Carrot Cake,22,Cats,49,Celebrity,17,Celebrity Dress,2,Celebs,1,Ceremonial Cake,9,Certified Pre-Owned Vehicles,1,Cheese Recipes,4,Cheesecakes,251,Chicago,7,Chicago Auto Show,2,Chicken Recipes,14,Chiffon Cake,5,Children's Health,21,Chile,7,China,21,Chocolate Cake,395,Christmas,35,Christmas Cake,23,Christmas Travel,14,Classic Cars,39,Cleaning Tips,144,Clinical Practice,1,Clothes,1,Cocktail Recipes,2,Coconut Cake,21,Coffee,1,Coffee Cake,15,Coliseum,1,Colombia,18,Colorado,32,Columbia,3,Communication,2,Companies,2,Compassion,2,Computing,16,Connecticut,4,Consumer Electronics Show,5,Cookies,10,Cooking,8,Corporate Travel,2,Costa Rica,13,Country Travel,250,Creative,309,Creative Idea,22,Creative Ideas,37,Croatia,15,Cruiser Travel,16,Cuba,18,Cultural Travel,66,Cupcake,322,Customs & Classics,2,Czech Republic,6,D.C.,2,Dandruff,1,Dating,18,Dating Advice,73,Dating Advice for Women,22,Dating Tips,13,Decor,23,Decorating Ideas,181,Delaware,1,Demotivational,636,Denmark,13,Dental Health,26,Dentistry,1,Depression,24,Desert Travel,1,Desserts,3,Detroit Auto Show,4,Diabetes,25,Diet,131,Dining Out,3,Dinner,15,Disease,116,Diverse,1,Divorce,16,DIY,112,DIY Fashion,34,Dogs,156,Doughnuts,5,Dress,29,Drink,27,Drinks,1,Drinks & Cocktails,4,Driving,3,Drugs,3,Dubai,15,Ears,2,East Africa,4,Easter,1,Easter Island,1,Easter Travel,1,Eco Travel,18,Ecuador,7,Education,88,Eggs,3,Egypt,4,Electronics,4,Electronics and Gadgets,2,Emirates,1,England,13,Entertainment,148,Enthusiasts,131,Entrepreneurship,40,Estonia,2,Eswatini,1,Ethiopia,2,Europe,110,European Food,8,Exercises,51,Eye,300,Eye Health,28,Eyebrow,56,Eyelash,20,Face,54,Facts,284,Fall Travel,43,Family,16,Family Travel,128,Faroe Island,1,Fashion,395,Fashion for Kids,2,Fashion for Man,12,Fashion for Woman,31,Fat Loss,91,Father's Day Cake,4,Father's Day Travel,1,Featured,218,Features,1913,Fertility,2,Festival Travel,25,Fiji,6,Finance,10,Finland,16,Fish & Seafood,13,Fitness,1210,Fitness & Exercise,219,Florida,69,Food,141,Food and Drink,14,Food Recipes,7,France,37,Frankfurt Motor Show,2,Free Travel,3,French,6,French Polynesia,5,Friendship,40,Fruit & Veggie Recipes,8,Fruitcake,70,Fruits,4,Fuel Economy,1,Fun,42,Funny,546,Gadgets,31,Galapagos,3,Games,13,Garden,24,Gardening,276,Gearheads,1,General,7,Geneva Motor Show,3,Georgia,14,Germany,18,Get Healthy,63,Ghana,2,Girlfriend Grooming,10,Google,15,Graduation Cake,2,Gratitude,11,Greece,37,Green Living,5,Greenland,1,Grooming,89,Guatemala,2,Hair,1264,Hair Care,317,Hair Color,299,Hairstyle,65,Hairstyles,855,Halloween,41,Halloween Cake,12,Halloween Travel,9,Happiness,19,Hawaii,53,Hayden Panettiere,1,Headache,22,Health,3176,Health & Fitness,300,Health Care,492,Health Insurance,1,Healthcare Tech,6,Healthy,12,Healthy Drinks,31,Healthy Eating,186,Healthy Habits,159,Healthy Living,347,Hearing,1,Hiking Travel,63,HIV/AIDS,4,Holiday Travel,28,Holland,1,home,31,Home & Garden,205,Home and Decor,484,Honeymoon Travel,128,Hong Kong,13,Horoscope,31,Hot Rod Power Tour,1,Hotels,71,Housekeeper,8,Hungary,3,Ice cream Cake,21,Iceland,42,Idaho,4,Ideas,11,Illinois,13,Imports,1,Impress a Girl,20,Impress Women,4,Independence Day Travel,1,India,36,Indiana,5,Indonesia,13,Indoor Gardening,69,Industry,5,Inspiration,58,Insurance,5,Internet,19,Internship,8,Interview Skills,37,Investing,12,iPad,2,iPhone,6,Iraq,1,Ireland,36,Island,60,islands,2,Israel,10,Italy,56,Jamaica,8,Japan,45,Jealousy,2,Jewelry,13,Job Search,47,Jordan,6,Just For Fun,2,Kansas,6,Kentucky,2,Kenya,2,Kids & Pets,10,Kitchen,67,Koala,1,Korea,2,Kyrgyzstan,1,Labels,1,Lamb,2,Laptops,4,Latin America,3,Latin American Food,1,Latvia,1,Laundry,6,Layer Cake,95,Leadership,44,Legs,1,Lemon Cake,18,Life,1,Life Hacks,277,Lifestyle,1582,Lips,134,Lithuania,2,London,24,Long Distance Relationship,24,Los Angeles Auto Show,14,Louisiana,9,Love,165,Lowa,4,Lunch,5,Luxembourg,2,Luxury Travel,35,Maine,6,Maintenance,3,Makeup,608,Makeup & Beauty,11,Makeup Tips,77,Malaysia,1,Maldives,15,Malta,2,Mango Cake,3,Manicure,10,Marketing,10,Markets,11,Marriage,97,Marshmallow,3,Maryland,6,Massachusetts,9,Massage,5,Mauritius,6,Meditation,35,Men & Women,18,Men's,5,Men's Health,14,Menstruation,21,Mental Health,302,Mexico,74,Miami,13,Michigan,5,Microsoft,6,Middle Eastern Food,2,Mind,3,Mississippi,2,Missouri,7,Mobile,22,Moldova,1,Monaco,1,Money & Career,22,Monkey,3,Montana,12,Morocco,20,Mother's Day Travel,1,Motherhood,16,Motivation,2,Motorcycles,106,Motorsports,2,Mousse,2,Muffins,9,Mug Cake,14,Multiple Sclerosis,1,Muscle Cars,4,Muscle Cars & Hot Rods,3,Muscle Gain,2,Myanmar,9,Nail Art,195,Nails,252,Namibia,4,Nature,4,Nature Travel,102,Nepal,6,Netherlands,11,Nevada,23,Nevis,1,New Bikes,2,New Car Deals,1,New England,5,New Jersey,2,New Mexico,6,New Year Fashion,6,New Year's Day Travel,6,New York,55,New York Auto Show,3,New York City,20,New Zealand,47,Newfoundland,1,Newlyweds,4,News,334,Nicaragua,2,North America,11,North Carolina,6,North Dakota,1,North Ireland,1,Northern Ireland,1,Norway,20,Nutrition,447,Occasional Travel,9,Oceania,1,Offbeat,564,Ohio,6,Oman,5,Online Date Tips,2,Operating Systems,2,Oral,4,Oregon,10,outdoor,3,Outfits,166,Ownership,61,Pain,24,Painting,16,Pakistan,3,Panama,5,Pancake,19,Panda,1,Panna Cotta,3,Paraguay,1,Parenting,371,Paris,23,Paris Motor Show,4,Pasta,2,Pastry,7,Pebble Beach Concours d'Elegance,2,Pedicure,4,Penguin,4,Pennsylvania,10,People & Places,88,Perfumes,14,Personal Finance,164,Peru,21,Pets,209,Phoenix,1,Photo Feature,1,Pie,27,Pimple,3,Plum Cake,1,Poke Cake,10,Poland,3,Popular Ingredients,26,Pork Recipes,7,Portable Media,14,Portugal,21,Pound Cake,55,Prague,1,Pregnancy,112,Premium,1,Printer,2,Protein Bars,1,Psychology,1,Pudding,9,Puerto Rico,7,Pumpkin Cake,45,Qatar,6,Quick & Easy Recipes,11,Real Estate,72,Recalls,4,Recipe,1098,Recipes,52,Recipes & Meal Ideas,3,Recipes By Course,5,Relationship,167,Relationship Advice,180,Relationship Advice for Men,23,Relationship Advice for Women,27,Relationship Problems,58,Relationship Secrets,14,Relationships,185,Research,94,Resort,11,Restaurants & News,13,Resume,11,Retirement,10,Reviews,1,Rhode Island,2,River Travel,2,Road Trips,49,Romania,4,Romantic Getaways,15,Rome,5,Russia,16,Safety,5,Saint Lucia,1,Saint Patrick's Day Travel,1,Salad,6,San Miguel de Allende,1,Science & Tech,66,Scotland,10,Seasonal,56,Seasonal Travel,59,Security,9,Self Help,14,Self-Care,3,SEMA Show,5,Senior Relationship,2,Sex,7,Sexual Health,19,Shanghai Auto Show,7,Shaving,1,Sheet Cake,20,Shirt,4,Shoes,29,Shopping,10,Shots & Shooters,1,Side Dishes,4,Sightseeing Tours,2,Singapore,19,Ski Resorts,10,Skin,429,Skin Caare,1,Skin Care,610,Sleep,62,Slovenia,6,Small Business,164,Smartphone,28,Smile,1,Smoothies & Juices,3,Snacks,1,Social Media,44,Solo Travel,24,Solomon Islands,1,Somoa,1,Soth Africa,1,South Africa,14,South America,3,South Carolina,4,South Dakota,5,South Korea,4,South Pacific,2,Space Travel,14,Spain,33,Special,46,Special Cake,579,Special Feature,113,Special Features,490,Sponge Cake,15,Sports,22,Sports and Exotics,4,Sports Cars,8,Spring Travel,23,Squirrel,1,Sri Lanka,6,Strawberry Cake,22,Street Fashion,8,Stress Relief,35,Stroke,2,Student Travel,1,Style Guide,25,Summer Travel,53,Summer Vacation,8,Supercars,10,Sweden,19,Swiss Alps,1,Switzerland,21,Tahiti,1,Taiwan,3,Tanzania,1,Tarts,12,Tattoos,82,Taxes,7,Teas,2,Tech,89,Tech Advice,12,Tech Education,7,Tech Hacks,19,Tech Updates,2,Technology,19,Teen Advice,4,Teeth,5,Tennessee,6,Texas,57,Thailand,31,Thanksgiving Cake,4,Thanksgiving Travel,5,Therapy,3,Things to Do,165,Tibet,2,Tips,264,Tips & Tricks,6,Tokyo Motor Show,2,Tools & Skills,16,Top Stocks,1,Top Stories,1,Traditional Cake,4,Train Travel,23,Training,1,Transportation,22,Travel,1044,Travel Advice,64,Travel Apps,1,Travel Guide,40,Travel Tips,149,Trends,7,Trucks,1,True Health,5,Tunisia,2,Turkey,10,Turkish,1,Tuscany,1,TV,2,UAE,10,UK,40,Ukrine,1,Understanding Women,28,Urban Travel,47,Uruguary,1,USA,630,Utah,12,Uzbekistan,1,Vacation Travel,245,Valentine's Day Cake,7,Valentine's Day Travel,1,Vanilla Cake,17,Vegetables,3,Vehicle Travel,2,Venezuela,1,Vermont,4,Victoria Falls,1,Video,5,Vietnam,5,Virginia,5,Waffles,3,Washington,15,Washington DC,20,Waxing,19,Web & Social,17,Wedding,87,Wedding Cake,549,Wedding Dress,30,Weddings,60,Weddings Travel,4,wei,1,Weight Gain,29,Weight Loss,760,Weird,172,Wellness,201,West Indies,2,Wi-Fi,2,Wildlife Travel,13,Winter Travel,56,Wisconsin,5,Women Lifestyle,24,Women's,689,Women's Health,173,Work Environment,77,Workout,8,Workouts,81,Worldwide,155,Wyoming,2,xxx,1,Yemen,1,Yoga,85,YouTube,3,Zadar,2,Zambia,3,Zimbabwe,4,
dearJulius.com: 15 Expert Tips for Startups Seeking Angel or Seed Financing
15 Expert Tips for Startups Seeking Angel or Seed Financing
Loaded All Posts Not found any posts VIEW ALL Read More Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy