How to Know Whether You're Ready for a Seed Round
Originally published: 03/11/2017 17:21
Publication number: ELQ-28976-1
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How to Know Whether You're Ready for a Seed Round

A guide for founders on knowing whether or not they're ready for a seed round. Tips included!

Introduction

Whatever people say about there being too much money out there, or not enough, about angels and VCs fighting to get a share of your business, or shutting you down, raising capital is hard work, always, and from the very beginning. It’s a demanding process that requires you to learn a dance you are most certainly unfamiliar with. It is best served by a conscientious, diligent and long-term approach to investor relations. Successful fundraising requires persistence and enthusiasm as well as constant and sustained efforts over the lifetime of your business if you want to optimize growth and eventually hope to accomplish your vision.


In this Founder’s Guide series on seed financing you might find a few useful tips and tricks that might guide you through your journey as an early stage entrepreneur.


Episode 1: Am I ready for a seed round?


It’s all about building solid foundations. Family, friends and angels can help you get off the ground with the small amounts you need initially, but you will soon need (and want) to reach out to other players outside of this immediate circle (incubators, accelerators, VCs and the like).


The checklist:

  • Step n°1 |

    People, people, people

    The first thing you need to figure out is whether or not you have the human resources and competencies in-house necessary to effectively execute on your idea.


    Make sure to gather and bind key personnel and founders to the company.


    Offer them a fair incentive structure as compensation for lower salaries, long term commitment and engagement.


    Use external partners only for executing specific tasks limited in time. Do not outsource strategic responsibility for activities key to your business’ long term development (especially with regards to any sales, marketing, product development, HR or fundraising activities!).

    How to Know Whether You're Ready for a Seed Round image
  • Step n°2 |

    Entourage 

    Co-create your idea along with industry experts in your field, angels, advisors and other potential partners. They will have valuable feedback and know-how, as well as help you refine your offering before actually addressing the market. Their network, support and expertise will also add to your credibility when fundraising.

    How to Know Whether You're Ready for a Seed Round image
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