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How Do I Find Seed Funding For My Startup?

How to Attract Investors and Get Your Piece of the Pie!

When it comes to business start-ups, we live in a black-and-white, goal-oriented world, which means, you are either winning or losing. Winning however often requires having to find investors and getting the necessary funds at the right time in order to get ones start up venture off the ground. The truth about entrepreneurship is that no matter how good an idea one has, having the ability to find investors and get early stage funding is extremely important. This is where seed funding comes in, entrepreneurs have several options for finding the seed capital they need, like the following perhaps!

Bank Loans

Bank loans come in many options, shapes and sizes, from the small micro-loans to the six-figure loans that are provided by the major banking institutions. Bank loans are usually a lot easier to get hold of if a person has a considerable amount of assets to their name, such as, home equity or third-party guarantors etc. And if entrepreneurs want to obtain a line of instead of a fixed-amount loan, they won’t have the need to pay the interest until they have spent the amount of the loan.

Business Angels

Broadly defined, ‘business angels’ or ‘angel investors’ are high net-worth individuals who make investments in start-up ventures and usually look forward to making investments in a start-up at an early stage. Like institutional venture capital firms or VCs, many angel investors provide cash to young entrepreneurs and ask for equity in return. One major difference is that angel investors prefer to invest small amounts of money in startup companies as compared to venture capitalists, which makes them a great resource for startup businesses that have exhausted the funds from friends and family and are not ready to approach venture capitalists for funding yet. Some angel investors are also members of groups which gives them the ability to increase their access to investment opportunities, allowing them to hedge their risk.

While searching for angel investors to target, it is important to remember that choosing an angel investor is also a great way of getting an advisor as well. Doing your research while you find investors of this kind will allow you to get one that can make a contribution with their knowledge, experience and their business network, not to mention the cash that you will need to help you business grow.


Crowd funding is another popular option when it comes to getting seed funding for your start up venture. Crowd funding is all about persuading individuals who you’ve never met in contributing small donations to your cause. Once you get the donors that you need, you will get your hands on some serious cash and all you need to know is how to attract investors on some of the popular crowd funding websites such as, Kickstarter and IndieGogo and so on. One of the best ways to attract people on these online outlets is by offering them special rewards, such as, free products or discounts etc, in return for their donations to your startup.

Venture Capitalists

As the name implies, a venture capitalist is a person who invests in a start up venture, or in a business that is looking towards expansion. Unlike other investors, venture capitalists normally look for a higher rate of return on their investment. Venture capitalists receive most of their funding from limited partners, public venture funds and hedge funds, which means that only one percent is invested by the actual partners of the firm. That being said, it is important for entrepreneurs to understand that VCs are answerable to their limited partners, which is why they set high initial expectations at the very beginning of the fund cycle.

What about Family and Friends?

One of the most common forms of startup funding is via friends and family. In some cases, banks or independent investors might not want to risk their money on you, but the same cannot be said for people who you know, such as, your family and friends.  They are your best chance in securing the money which is required to get your start up business off the ground. Bringing your friends and family as one of the investors in your business startup will also transform them into motivated advisors. Plus, having your family and friends on board will most likely make them more forgiving than outside investors if your business, God forbid! Comes to a grinding halt.

Raising money from one’s personal network of family and friends is not only a great way to find investors, but also a great way of securing capital from future investors, because they will notice that your startup is grounded in a network of family and acquaintances.

Ways of Attracting New Investors

The following are some of the ways in which entrepreneurs can attract new investors towards their business ventures.

  • Before jotting down a business plan, you will need to learn about the parameters of your venture capital. As an entrepreneur, one should never use the same business plan at every meeting, because different investors have a different combination of variables when it comes to a startup idea.
  • You can impress investors by having a clear statement of purpose for your start up venture. This means that your statement of purpose should be a single paragraph of concise language which properly defines your business goals for the next two to five years.
  • Another way on how to attract investors is by providing the information on all members of the ownership team. The business plan should contain a section on each executive and all high-level staff members. The experience of the team that you put together can very well attract investors who are not that concerned about the product or service as they are with office dynamics.
  • Complete a projected inventory, which means that you will need to write down the names and description of all the equipment that will be in use by your start up in order to function.
  • Calculate all the funds that you currently have available, such as, your savings accounts, your property or any other assets that you might have. This will be critical in convincing investors of your ability to startup a business.
  • As an entrepreneur and head of your team, it will be important for you to fill the gaps in your management team. If you can’t be away for a week without having to check on your team, then you will need a stronger team. This is especially true if the investors include private equity groups that are always on the lookout for a deep bench when they are recapitalizing a startup business.
  • And finally, another way on how to attract investors is by creating an exit plan. It is important for you to create an exit plan. Many successful do not wait for a life-changing event to plan a process.

Ending Note

In the end, it’s all about that little curve that takes an entrepreneur from having noodles to a steak. And that is what investors refer to as “The Moo” or momentum. As an entrepreneur, you will need to worry more about who you are as the founder of the company. That is, your start-up venture must reflect you just like your personality does. That is what will make your startup unique and it is what will set the tone for the business values and culture and will be how you attract investors.

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