It Takes Money to Make Money: How to Obtain Seed Funding 1

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

While the generosity of your family and friends can help you kick start your business idea. It’s not enough to turn your startup into a highly valued company. A vast majority of businesses rely on external funding or seed money.

In fact, founders have to raise seed capital through several rounds of funding. These funding rounds allow investors to invest cash in exchange for partial ownership or equity.

Want to know more about obtaining seed money?

Let’s start with the seed funding definition.

What Is Seed Money?

This refers to securities offerings meant to support the business in its early stages. Also referred to as seed funding, the early investment allows the business to improve its product and grow its market.

How to Obtain Seed Money

The first thing you need to understand is that your startup’s worth is typically depended on the value of your idea. If you want the investors to offer their cash to fund your startup, you must offer something of value.

Want to know how you can get seed money for your startup.

Keep reading!

Do Your Homework

The first step towards obtaining your first seed capital is to conduct research. While researching, find out which venture capital firms are available out there. Today, it is very easy to find out about this.

All you have to do is search online using relevant keywords. For instance, venture capital firms or top VC firms. From the search results, find out what types of startups each VC firm is likely to fund.

Make Your First Appointment

Now that you have your list, make your first appointment. Once you do so, send a synopsis of your business plan before your first meeting. In your synopsis, it is important to include the major points.

For instance, include a brief about your business, revenue projections and your plans for the seed money.

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Defend Your Idea

On the appointed day, arrive 15 minutes or half an hour before your meeting with the investors. Doing so, allows you to scout the environment and even prepare yourself before the big meeting. Remember, this is not just an opportunity for you to get Series A funding but a way to secure Series B and even C.

What you need to know is that VCs make snap judgments. As such, your pitch may fall short for reasons beyond your control. Want to strike a great rapport with the VCs?

  • Be confident
  • Prepare your personal story
  • Be authentic

In your first meeting, cover the basics. For instance, your background, your product, company history, business model and marketing strategy. The good news is that you already prepared this in your full business plan so, don’t forget to carry it into the meeting.

What Comes Next?

In your journey to obtain seed money, the investors may decide to fund or not fund your idea. What you need to know is that it all depends on you. If you want to increase your chances of getting seed grant, follow up.

Don’t wait too long to follow up after your first meeting. We recommend following up after 2 days. Anything after 2 days is too long.

Remember, investors are always thinking about the next deal.

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