What do you ideally need in place to raise Seed Funding? Will an idea and a good team get funded or do you need company with hundreds of customers?

I like to take a rule from the Steve jobs playbook and use simple circles... one larger than the other but no more than 2. your most immediate target (realistic reachable) and one of the "enemy" competitor company. or overall untapped market cap. **for this to be effective you must provide as accurate projections as possible** no bar graphs and as little or no text as possible... remember that a deck is a companion to the speaker... avoid bullet points and use the deck to entertain rather than educate... is not a class is a pitch. :)

I'm both an active angel investor and entrepreneur who has recently raised capital. I'll start with what is standard in Silicon Valley and then apply various multiples and discounts where relevant. For an angel or early seed round, the current going rate is $3m-$5m pre-money via a capped note or priced round. Priced Rounds typically most often use the "Series Seed" docs and Convertible Notes typically are 18-24 month terms with a 15% discount. I don't mean to be argumentative but Marco is incorrect that valuation can be avoided by a capped note. And in general, there is no way to avoid setting a valuation except via an uncapped note, which is almost unheard of. Setting your cap and discount will have a significant impact on your cap structure, the same (and in some cases) worse than a priced round. This $3m - $5m range is what I'd call current market value in the valley for "ideation-stage" capital. This is that there is a team in place, typically some form of MVP and in some cases some very basic market data supporting the general thesis of the raise. In the other market I'm familiar with (Canada), the range for the same stage of capital is $1m - $3 with most being in between $1m and $2m and most preferring priced rounds over notes. These rounds rarely have a real lead since the raise is typically $500k or less, so if you price it reasonably, most (good) angels will accept the terms as is. The low and high end of the ranges are discounted and pushed by the credibility presented most often by the team (done it before, worked for a notable company, had some relevant success) or strong evidence of the thesis being correct. It's also the Founder's option to price the round at the top end of reasonable or provide what you might consider a discount, depending on the kind of investors you are courting. So while this is what I'm seeing as "current market conditions" there is price elasticity in any market. The best way you know if you've priced it right, is if people are buying. Any angel investor should be able to give you a conditional answer after the first meeting (subject to playing with the product, reading terms, meeting the rest of the team). Any angel investor in ideation stage capital who can't give you a yes, no or subject-to yes in the first meeting is not worth pursuing IMO. Any investor who can't close within 3 meetings or conversations won't close (9 times out of 10). Happy to talk to you about the specifics of where you're at, what might help you improve your odds and generally get you closer to the point where you're ready to raise.

AngelList is your best bet. Since you're asking the question, chances are you don't have a way to get introduced to these investors. The simple truth (like it or not) is the chances very low that you'll get a deal done without an introduction from someone they trust. AngelList can help with that, so can going to networking events. And finally, If you're the introverted developer type, you can also get their attention by just building something really cool on your own, followed by some serious traction. Arguably the best strategy of them all.

It entirely depends on the kind of business you have. If you have a tech startup for example, there are pretty reliable assumptions about each round of funding. And a business plan and financial forecasts are almost totally irrelevant to sophisticated tech investors in the early stages of a company's life. Recent financial history is important if the company is already generating revenue and in that case, a twelve-month projection is also meaningful, but pre-revenue, financial forecasts in tech startups mean nothing. You shouldn't give up more than 10-15% for your first $100,000 and from that point forward, you should budget between 10-20% dilution per each round of subsequent dilution. In a tech startup, you should be more nervous about dilution than control. The reality of it is that until at least a meaningful amount of traction is reached, no one is likely to care about taking control of the venture. If the founding team screws-up, it's likely that there will be very little energy from anyone else in trying to take-over and fix those problems. Kevin is correct in that the board is elected by shareholders but, a board exerts a lot of influence on a company as time goes-on. So board seats shouldn't be given lightly. A single bad or ineffective board member can wreak havoc on a company, especially in the early stages of a company's life. In companies outside of tech, you're likely going to be dealing with valuations that are far lower, thus likely to be impacted with greater dilution and also potentially far more restrictive and onerous investment terms. If your company is a tech company, I'm happy to talk to you about the financing process. I am a startup entrepreneur who has recently raised angel and VC capital and was also formerly a VC as part of a $500,000,000 investment fund investing in every stage of tech and education companies.

I'm a small-time investor and have been working for and with startups for 13 years. The time to take seed capital is: - When you've proven demand for your product by making sales. - When you have at least one repeatable, predictable, and profitable system in place for selling your product. - When taking an equity investment would let you grow the company faster than the other means that might be at your disposal: bootstrapping, debt financing, organic growth, joint ventures, etc. There's a trade-off. You want to get the idea validated up-front and get as far as possible as you can on your own, but not spend so much time doing this with meager resources that the opportunity passes you by. You don't want to give away the whole company to your investor, but you also don't want to stunt your growth and give up huge potential profits just because you were holding out for slightly better terms. The better your sales, and sales growth, the better the valuation you'll be able to negotiate. A great idea and a proof-of-concept alone are worth basically nothing. A company with sales is worth more. A company with sales growth is worth even more. A company with month-over-month sales growth, ongoing relationships with customers who repurchase, and steady-state profitability is worth *much, much* more. (Steady-state profitability means that if the company's number of customers stays the same, the business operations turn a profit. Often, early-stage companies that have a recurring-revenue business model will spend more to acquire a new customer than they earn from the first sale; the cost of acquisition is amortized over the lifetime of the customer. This is because they want to grow their recurring-revenue base and increase future profits at the expense of short-term negative cash-flow.) All that being said, if you think you will need venture capital funding in the future, you should start looking for it long before you're going to need it. Have a "Plan B" in place, too. Don't get stuck with your back up against a wall, hoping and praying that your seed round will close before you start bouncing checks. If your investor knows you're going to go bankrupt without the investment, they have a lot of leverage for getting very favorable terms!