How to Get Seed Funding for Your Tech Startup by Thinking Like an Investor

Cut the Check

Fundraising seed capital for your startup is a pain, right?

You don’t really know what investors are looking for or what chances you have to raise the money you need.

In this article, I’m going to walk you through how investors think about your investment.

Now, every investor is different, and despite what people tell you, seed investing can be very subjective. But this guide is meant to give you a general sense of what they are looking at and for, so you can be one step ahead of them (most of them).

Ready to dive in?

Let’s do it, but first, two sentences to put things in context:

Seed funding was meant to enable innovators to build and prove out their ideas in the marketplace, but with the increasing size of seed rounds (often $1.5M or more), investor’s expectations have also swelled.

What was an exceedingly difficult task in the past has only gotten more challenging, and startup founders need to work harder to distinguish their business from a multitude of other promising companies.

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The most important thing you can do as a founder of an early-stage startup

I had the pleasure to attend a great panel discussion put on by Strawberry Creek Ventures and Castor Ventures, firms that invest in Berkeley and MIT alumni respectively. The two panelists were both fantastic entrepreneurs working on genuinely world-changing solutions, and over the course of the evening, they recounted their entrepreneurial journey. After the moderator finished asking her questions, the discussion was opened up to audience questions.

I asked the two entrepreneurs how they got their ideas off the ground at the earliest stages of their enterprise. This is a topic that I’m obsessed with given that it’s my job to help entrepreneurs launch and grow their startups. Both answers were great, but one truly resonated with me.

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Getting VC funding without a huge network or diploma from Stanford

The other day I met a very charismatic, intelligent, and driven young man at a venture capital summit in Silicon Valley. He had a compelling vision for an app that both solved a pressing social problem and had great commercial promise. He floated around the room striking up conversations with one person after another, and out of the hundreds of people that were there, he out-hustled all of them, by a long-shot. I had a chance to catch up with him briefly at the end of the summit asking him how meeting investors was going. He looked up at me, exhausted and simply replied, “It’s been better.”

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Should you look for a co-founder or raise capital?

I recently read a question on Reddit by an individual who was having difficulty finding a co-founder and asked whether she should first try to get funding, which would allow her to hire the team member that she needs. If you’re in a similar situation, my answer might offer a helpful perspective:

Investors look for the four ‘Ts’: total addressable market, tech, timing, and team. (I’d add a fourth T, which is traction.) Of those factors, my experience is that investors pay the closest attention to the team. Not having a single co-founder would put you at a tremendous disadvantage in that category.

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