If you really want to get startup seed funding, you should consider downloading “Startup Seed Funding for the Rest of Us” by Mike Belsito–it’s free for a limited time on Amazon, but well worth the “investment” if you miss out on the complimentary days.
However, if you are not a bookworm, there’s good news: I’ve done the heavy reading for you and summarized Belsito’s tips into an easy to digest blog (if only all aspects of a startup were so simple!).
By “the rest of us”, Belsito means the not ber popular startups likely focusing on tech and probably located in Silicon Valley. There are three major themes of the book, starting with building your team. Raising money is a job in itself, and you have to remember that investors are looking at idea strength as well as business strength.
Unless you’re in a startup hub, your investor options will be limited. The first step? Make sure you have a strong foundation.
Investors want to see a strong team dynamic. If they sense your team is in the works or weak, it doesn’t matter how great your idea is. Already, “the rest of us” are at a disadvantage, so you really need to stand out. Investing in a startup is risky, yet many founders forget that investors are facing such a risk. Your team strength can give them the assurance that you’ll be a success.
Why Even Bother?
Next, you need to understand why your startup exists before you can expect anyone else to understand it–let alone invest in it. One of the first things investors will ask you is, “Tell me about your startup.” Unfortunately, what they really want to know is the bare bones and what your products/services are doing now, not what your plans are and your dreams of the future. Investors have to live in a world of hard facts and “right now”. If your current project piques their interest, they may ask for your future plans, but you shouldn’t be the one jumping the gun.
Here is your answer: Your startup exists to fix a problem. Tell them how you’re doing that. Investors want to know the why, not the what.
See for Yourself
The best pitch in the world can’t do nearly as well as having a prototype. People learn in all kinds of different ways, and many are visual or need to touch to understand. Having a prototype can make the difference between engaging an investor and boring them. You don’t have to have a lot of money to make this happen. Check out Invision or Sketch to get started. Plus, a prototype lets investors know you’re serious and more than just an idea man (or woman).
This is the magical trifecta of getting seed funding, but it’s not a promise or a guarantee. Every investor is different, just like every startup is different. Research your investors to pinpoint the best match for your project and show them you’ve done your background “checks”. This shouldn’t be a numbers game, so plan your strategy well.
Date: 25 Mar 2015
Author: Murray Newlands