How to Get Pre-Seed Funding
Do you have a great startup idea but you lack the necessary capital to support it? If so, you are probably already looking for investors to support your project. There is one major problem, however. Many investors and investment companies tend to go with businesses with proven traction. They need to know a product has been tweaked and tested multiple times. Your idea should stand on its own before you even try to talk into a million-dollar deal.
So, how to proceed? Pre-seed funding. Pre-seed investment rounds are meant to be the starting point for your project idea to reach the big bucks. They basically establish what works and what doesn’t to help your business achieve important goals early on. Following are some tips that will help you get pre-seed funding:
Build Your Audience
Introducing yourself and what you offer is the first step to reaching your consumers. This can be in the form of email sign-ups, videos, blogs, social media, etc. Pick a strategy and go for it. Tell potential consumers about your company, your product, and what it can do. The more approachable and consistent you are, the more your audience will grow.
Test the Product
If you are looking for the best source of feedback, look no further than your immediate audience. In pre-seed stages, many companies only reach out to family and friends for their first rounds of prototype testing. However, if you have built a strong following, then it would be a good idea to include real potential customers. This will give you a more honest and specific look at who is really in your market.
Go Back to the Drawing Board
Once you have gotten enough feedback about your prototype, you are ready to make the right changes. Focus on what makes your product stand out. Anything to get the most value and functionality of your product matters. When you are tweaking your product, remember what problem in the market you are trying to solve.
Define Market Specifics
In the pre-seed stage, your product isn’t the only thing that gets a makeover; the market and customers also often change. So, review your market definitions and compare your initial goals to the customers that are engaging with your prototype now. Be sure to understand their buying habits. The better you know who your consumers are, the better you can approach them.
Focus on Credibility
Building credibility is a major goal of pre-seed funding. To get more than just seed funding, you need to have the data to talk numbers for future contracts. This data comes from being able to prove who your consumers are through current following and past interactions. It should show the steps you took to get from the initial prototype to what your product is now. By the time you are talking to seed investors, you should have research and recognition.
Lastly, you must have some revenue in your pocket as well. Pre-seed funding helps you kickstart your project. By the time you reach series A and seed conversations, you need to have your own money to cover the basics.
These are some guidelines that will help you get pre-seed funding. Pre-seed funding is a valuable resource that can help you build your audience and start engaging in the market.