Seed funding is vital to a startup. Before you can open up your company to public investment, you need to get the business off the ground, and for that you need finance.

So how do you go about raising those funds?

Do Your Prep Work

Nobody is going to invest in you if you can’t prove the value of what you’re offering, so before anything else, you need to do your prep work. This is where you’ll prepare to show that you have potential.

Educate yourself on the systems and terminology of seed finance.

You’ll need to understand not just the definition but the relevance of terms like SAFE (Single Agreement for Future Equity), for two reasons.

Firstly, to provide you with a map of the water’s you’re navigating.

Secondly, to avoid embarrassing yourself. If you don’t know the language of seed funding, then you’re not going to look competent to investors, no matter how strong your product is.

While you’re doing that, get the foundations of your startup in place.

Assemble a core team with the skills to make the business work and the CVs to prove it.

If you can, develop a prototype of what you’re looking to produce and do some customer testing to validate your idea.

Gather evidence that people want what you’re offering, as well as related data about the market you want to get into.

Build Your Pitch

Once you’ve got your evidence, it’s time to put it together in a pitch.

Stories are the key to connecting with people, so it’s essential to have a strong narrative.

What is the problem you’re solving with your product?

Why is it important? What is your solution? Why is now the time for that solution?

Your pitch should tell that story.

Your pitch also needs to cover some basic financials – what you’re looking to raise now, what the terms for that will be, and a predicted valuation for the company.

Use milestones and data from the sector to create a realistic but tempting valuation that will draw investors in.

Use this pitch to demonstrate why you and your team aren’t the risk so many startups appear to be. Sweep away those doubts and show the power of your plan.

The primary way you’ll present your pitch is through a short slide deck showing your idea and the narrative around it.

This needs to look professional as it’s your calling card to investors. But also have your elevator pitch ready, the short version you’ve practiced in your head and can whip out when you’ve got thirty seconds to attract interest.

Make Those First Contacts

Now that you’ve assembled your pitch, it’s time to start making contacts.

Most seed investors come in one of two forms – individual angel investors and seed funds.

Some VC funds also take an interest in seed funding, but only if it looks like a more significant funding round is coming soon, so don’t shape your approach around them.

There are several ways of making contact with these investors.

Online investing platforms provide one route, though competition there is stiff.

The same applies to pitch events, where investors have assembled to look for the next big thing.

Personal networks are invaluable, as the bonds of trust in them predispose investors to be interested. It’s worth taking the time to develop your local network for this reason.

The most potent sources of investors are existing investors.

If someone has invested in your company, ask if they know anyone else who might be interested and get them to provide an introduction.

The fact that they’ve already invested will act as social proof for the value of your business, and the personal contact will give you a good in.

Never ask an investor who turned you down if they can provide introductions. The fact that they didn’t invest will send the opposite message to the one you want.

Get Those First Meetings Right

Once you have an introduction, it’s time to make the most persuasive case you can.

To do this, meet with the potential investor in person.  Take your pitch deck as a starter, but don’t make that the focus of the meeting.

Turn it into a conversation, so that you can learn more about the investor and use that to get them onboard. Everyone likes to be listened to, so a discussion will create a more positive impression than a pure pitch.

Remember, you’re selling yourself, not just your product.

Convince the investor that you have the skills and personality to deliver, that they can trust their money to you.

With seed funding, the first cheque is the hardest to get. Once you’ve got some investment, you can use that as validation with other investors. Make the investments you’ve already gained part of the conversation.

As success turns to success, you’ll build up the momentum you need, as long as you’ve laid the groundwork at the start.

Also read:

How Active Seed Investors Can Make the World a Better Place

Five Key Ingredients of Great Entrepreneurs