Investors · Seed funding

What's the starting point for seeking funding?

Shannon Code Chief Architect

July 20th, 2014

I'm a developer and entrepreneur, I don't know what types of things an investor is looking for, the "common language" so to speak. Where do I start? I've got an idea and a poc that fills a big need. Angel or seed will be my first round.

Can someone offer a no fluff, to the point resource to educate myself? I tend to learn by exposing myself to a firehose and doing some matching algorithm in my head and sort of learning from the outside in. But don't really know where to start. I'd hate to look like a fool right off the bat because I'll be contacting people who invest all the time. 

Dimitry Rotstein Founder at Miranor

July 20th, 2014

If you're talking about software, then having an idea and a POC is probably too early even for angels these days. The best time to approach investors is when you have some real traction, and even then you should have some prior experience in dealing with investors. Otherwise, you should start with accelerators, and they will guide you from there (if you're accepted, of course). Just google "startup accelerator" and find the ones most suited for you. All accelerators have online application forms - pretty straightforward, though competition is fierce.

Sandy Fischler Experiential Marketing Director | Event Producer | Event Management | Entrepreneur

July 20th, 2014

I agree with Dimitry. You're unlikely to get the attention of an investor until you've reached a certain stage in your development, the days of getting funding to go on a fishing expedition are pretty much over as the costs for early stage development have dropped so much. 

The best thing you can do is start exploring whether there is real market demand for your idea, find a way to use low-cost tools like WordPress or other sites to create a functioning demo and see whether you can attract users. The most important thing you need to discover is whether or not there is demand out there to warrant the amount of time you're going to sink into the project. 

A good template for the process is following Steve Blank's "The 4 Steps to the Epiphany". You can get the whole book at Amazon, but start with just the first couple of chapter for free here:

Once you've gotten some market validation, then you start figuring out how to fund the next step. This whole process is a series of steps, don't feel like you have to build it and launch. It's test, validate, move to the next step or pivot if you can't validate. Each time you lock in validation, move to the next step. 

A good incubator is really invaluable and they're everywhere today. Look for ones that are very early stage and will take you through ideation. Most of the ones that offer seed funding are looking for teams with advanced ideas that have a certain level of market validation and are ready to hit the gas. 

Robert Clegg

July 20th, 2014

You can't read your way to experience. The nuances of investment discussions juxtaposed with business models, personnel, tech savvy, etc are way to intricate to be learned from a book. Do your best to get (and incentivise) an advisor who has the experience to work through it with you.

It's akin to falling in love  - tons of books written, all in retrospect, won't help you when it comes down to actually being in a unique relationship.

Happy to discuss if you reach out.