December 3, 2021

Everything You Need To Know About Seed Funding.

Seed funding is the funding for the business at its earliest stage. Seed funding may be groups or individuals who invest their own money after discovering the startup’s potential. Seed-stage investors India or seed-stage startup investors India helps fuel the growth of the enterprises and raise funding for their business. In the funding life cycle of a startup, after the idea has surpassed the concept stage, the next stage is known as the seed stage. Entrepreneurs approach investors during this early stage, including friends, family, and other investors who will help in financial support for their concept or products. These seed-stage startup investors focus on investigating the market, economic and technical feasibility of the opportunity. If the startup concept appears feasible, the Seed stage startup investors may support the financial resources. Once this process begins, the entrepreneurs begin forming the company and start developing the concept.

Many seed-stage investors in India or seed-stage start-up investors in India, which helps unlock the startups’ potential. They will help businesses access business networks technology and hire talent to make their ideas into reality. Seed capital is one of the earliest sources of investment for any startup. The purpose of the money that is raised might be used on research and development initiatives or MVP(minimum viable product). The startup needs to take the time to research, prepare and validate their ideas before approaching any investor to gain a higher likelihood of acceptance.

Why is Seed Funding So Important?

Seed Funding is often proved very useful for startups. Following are the advantages of seed funding

In any new venture, it helps to reduce the risk to the founder
It is sometimes used as working capital
It protects from any challenges like funds insufficiency
By bringing strategic partners, it helps to expand a business relationship
It helps to accelerate growth by providing means to scale up.

Types of Seed Funding

Crowdfunding: Crowdfunding platforms have become more trendy for seed funding. By using these open platforms, any startup can focus on its concept, idea, or product.

Corporate Seed Funding: Startups can gain more visibility as the big corporate investors are involved in this funding. Large enterprises such as Intel, Google, and Apple support startups regularly with this type of corporate seed funding.

Angel Investors – These investors invest seed funds in a startup in return for convertible debt or equity ownership.

Incubators: Along with providing seed funds, these types of investors focus on helping new and innovative ventures through training, and often they also offer office space. Many reputed and leading educational institutions such as IIMs and IITs also provide such services. Generally, Incubators do not focus on the equity holdings from startups.

Accelerators: Accelerators provide support by providing networking opportunities, training, and mentoring. Their primary focus is only on scaling up the startups rather than helping them in the early stages of innovation. Furthermore, accelerators usually focus on equity.

VC funding: After focusing on various parameters such as growth potential, market conditions, and founder’s vision, venture capitalists are some high-end investors who invest in new startups.

How to raise Seed Funding?

Your startup should have a creative and innovative idea that can be profit-oriented. Your passion for your startup idea should pitch equally in front of the investor. Your startup, seeking investment, should be ready with a well-documented business plan that describes the existing and potential competitors, market potential, market segment, and financial projections from time to time and for coming years.

Your investors can obtain partial ownership of your startup as the funding rounds for the startups are designed accordingly. Hence, the investors have long-term benefits such as valuations of the startups and profits of the startup during the short-term.

A startup and its funding follow a typical chain of rounds. The definite rounds of funding adhere to the operations, valuations, and growth prospects of a startup at different stages of the startups.

Pre-Seed Funding: Pre-Seed Funding is all about the introduction of the business to the funds. Generally, these funds are contributed by the promoters, acquaintances, or close relatives of the promoter. These funds are used towards the initial costs of setting up operations.

Seed Funding Series: It is known as the first official funding made available to a business. It includes

Series A Funding: This funding is provided to the companies that help them to scale their product and service offerings

Series B Funding: The startups that come to this series b have grown past their stage of development. The funds that are raised during this round are used to increase the personnel force and market coverage

Series C Funding: At this stage, companies have created good growth, and more institutions such as hedge funds, investment banks, and private equities get involved.

Many seed-stage investors in India or seed-stage startup investors in India; please visit this link if you want to explore more.

For any queries related to funding or joining as an investor, please email at info@hyderabadangels.in and call us at 040 – 4048 4444 and we will be happy to assist you.