Seed Fundraising Materials

Founders of early stage startups will at some point require funding to grow their business and will be searching for seed or angel investors for their first round of funding. To start with, they create a list of Investors, visit their respective websites or social groups, and start contacting them through their references or email. In this post, I am going to discuss about the important fundraising documents that most Investors ask from the Founders.

In the current competitive seed funding market, Investors are very selective while picking the Founders or startups and are looking to unlock outsized return potential by securing equity at a lower price point. As of now, many investors continue to express a bullish view on the pre-seed and seed stages because of an increase in Founder quality. Running a business is particularly challenging amid a capital shortage and heightened market volatility, and investors have been looking to back and support Entrepreneurs with a differentiated vision, strong team composition, and founder-market fit through the journey.

If contacting suitable prospective Investors and getting a response from them is a challenge, the process afterwards is even more challenging. Because, the first thing that these Investors ask for are documents that provide further information about the startup. This includes:

• A detailed business plan explaining the startup's business model, target goals, vision, mission, funding requirements, market research, competitor analysis, & so on.
• A detailed financial model which will have the estimated 3-to-5 year projections of the startup's revenue/income, profit & loss, cash flows, and balance sheet statements. In addition to this, a financial valuation summary must be included.
• A pitch deck with slides on the startup's business model, value proposition, funding requirements, market snapshot, and team information. In addition to this, an elevator pitch video can be included.

Now the exact requirements will vary from one Investor to another Investor. Some Investors have recommended standard templates (published in their website), which the Founder must customise as per their specific case.

If these documents are clear, concise, and well designed, the Investors can easily understand the Founder's vision and the startup's business model. This can result in the next round of funding process which will likely be a call or in-person presentation.

In a nutshell, these documents are crucial entry points in the fundraising pipeline for any seed or early stage startup Founder. Assuming that the Founders have high potential and their business model is scalable, repeatable, sustainable, & profitable (among other market factors), well designed & presented documents can help them to successfully close seed rounds.