Seed funding for startups needs several preparations, spanning investment pitch decks, market research, and company legality.
Heaptalk, Jakarta — Early-stage startups generally obtain funding from personal funds or invite relatives, family, angel investors, or crowdfunding as initial investors. Investments provided are not always in the form of funds but can be in the form of assets whose value will be determined.
Alpha JWC Ventures provides a list that startups can prepare to enter the seed funding stage, spanning investment pitch decks, market research, and company legality.
- Investment pitch decks
The investment pitch deck is a presentation that contains a mature concept summary of startup ideas, teams, markets, and budgets. This summary aims to explain briefly the company and the goals it wants to achieve.
This presentation should include the problem, solution, market, traction, team, competitors, and finances. Founders must be able to convince investors that the problems startups want to solve are crucial. In addition, the solutions offered by startups also must be effective.
The market is one of the considerations for investors, primarily in determining an exit strategy. Investors will choose startups that target the market in a large area compared to the market in a small area.
Traction contains an explanation of business growth from month to month. Early-stage startups are not mandatory to include traction on the pitch deck.
Details about the team need to be included in the pitch deck. The company’s progress depends on the team’s execution rather than the idea itself.
Reviews of competitors can provide investors with an understanding of the differences between these startups and other companies engaged in the same field. Investors will be delighted if the founder knows the details of competitor companies.
Financial points will describe business projections for the next few years and the amount of funds needed to achieve these projections. Investors surely want to know the startup’s goals and the estimated capital that can be provided for seed funding.
Market research is an essential point that startups need to prepare to obtain seed funding. Startups must identify their products offered to the market to choose individual or institutional investors. Mapping market orientation and target demographics are also needed.
Startups should learn about their competitors, the company’s added value compared to others, and their target market. In addition, founders must also provide company predictions for the next few years.
- Legality of the company
Startups need to ensure that the legality of the company, including several permits, is complete and appropriate. Startups should also verify if there are any legal or financial issues that challenge the company’s reputation.
After all these preparations have been completed, startups can submit requests for seed funding from investors. If granted, investors will see the development of the company’s products after obtaining the investment.
At this stage, startups and their products will receive the attention of the public and the media. The public’s evaluation of the company’s reputation and product quality will greatly determine business continuity. Therefore, maintaining reputation and quality is critical although the startups have succeeded in obtaining seed funding.
