Seed Stage (Pre-Seed Stage)

What is Seed Stage (Pre-Seed Stage)

The seed funding stage is a startup's first official step in equity funding — it typically represents the first official money a business venture or enterprise raises. This early financial support is ideally the "seed" that will help to grow the business. 

What is seed level startup?

During the seed stage, a startup is figuring out what its final products will be and who its target demographic is. A startup uses seed funding to get answers to those questions and employs a founding team to complete these tasks.

What is pre seed stage startup?

Pre-seed funding is often the first cash injection a startup gets, besides the money they get from savings, loans from family and friends, or — in the case of a serial founder — cash from a previous exit. 

How to get seed funding?

Think of the fundraising process as somewhat similar to a traditional sales and marketing funnel for a B2B enterprise business. In its simplest form, you can break your fundraising approach into three steps:

  • Attract and add qualified leads to your top of the funnel on a regular basis.
  • Nurture and move the leads through the funnel with the goal of closing them as an investor
  • Serve investors and create a great experience until they become promoters.

So, start by gathering qualified potential investors from outreach, introductions, or inbound interest. Then filter them by whether they fit your model of an ideal investor. Next, stay fresh in their minds by keeping in regular communication whether you're actively seeking funding at the moment or not.

What are Seed funding examples?

Seed money can come frome several different sources. The most common ones include: 

  • Owned funds: This is when the founder(s) use their savings, credit cards, and other assets to build their business. Pouring personal funds into your venture can increase the owner’s credibility in the eyes of investors who might help you in the future.
  • Friends and family: Often the easiest way to finance your business is by asking your close friends and family members for funding.
  • Angel investors: Angel investors are potential investors like lawyers, doctors, and existing entrepreneurs interested in investing their wealth into new startups.
  • Seed venture capital firms: Venture capital firms are firms that provide private equity financing to startups. These firms typically demand higher equity stake than individuals and relatives.

For Founders

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