How do you raise capital without traction?

Focus on the total addressable market (TAM). Entrepreneurs raising capital without traction, need to tell a story that illustrates how their total addressable market (TAM) is so attractive and ripe for disruption that future consumer adoption will be readily achieved.

What is the difference between angel investment and seed investment?

Seed capital typically comes in smaller amounts of money that a start-up raises from people they know. Angel investors generally are experienced business owners and investors who have a high-net-worth and contribute more considerable sums of money.

Why seed funding is important?

Seed Funding proves to be very important for any business. seed fundraising provides you with funds even before your business has started earning. It helps meet your fund needs and makes up for any insufficiency you might be facing. It provides you with working capital to smoothly run your day-to-day business.

How much traction is needed for seed funding?

The “traction” that’s relevant for your current stage should be in the range of 0.1\% to 0.5\% of your projected 36 month customer base. 0.5\% means you can command the top end of the valuation. 0.1\% means you are likely to get a serious look.

What is the difference between an angel investor and seed investor?

Angels and seed investors focus more on qualitative factors such as who the founders are, high-level reasons why the business should be a big success, and ideas about product-market fit.

What do investors need to know about seed capital?

They should also have a clear concept of the interests and goals of the investors, and an understanding of the capital structure of proposed funding. Seed capital is a form of equity financing, where the business owners give up a percentage of ownership in exchange for capital. It stands in contrast to debt financing.

What is the difference between angel investors and venture capital investors?

Seed or angel investors are typically entrepreneurs who founded their own companies and had successful exits. Their main skillset is understanding the role of the entrepreneur in the business, and they often have very specific product knowledge. Venture capital investment teams are often a mix of entrepreneurs and ex- investment bankers

How to raise seed capital and Grow Your Startup?

There are a few guidelines that founders should listen to carefully in order to raise seed capital and grow their startup. First and foremost, leaders should be prepared before meeting with prospective investors, and have a list of references who will back the idea.