B2BVault's summary of:

Raising a seed round 101

Published by:
Lenny's Newsletter
Author:
Terrence Rohan

Introduction

Raising seed money is hard and risky. This guide gives step-by-step help from top founders on how to raise your first funding round.

What's the problem it solves?

Founders often don’t know how to raise money, how much to raise, or who to raise it from. This article shows exactly how to plan, pitch, and close a seed round with smart advice from people who’ve done it.

Quick Summary

Seed funding is when founders raise money to start growing their company. It's usually the first real investment round. But it can be confusing, emotional, and stressful. If you don’t do it right, your business may never get off the ground. This article explains how to decide if raising money is the right move, how to plan for it, and how to make sure you find good investors.

To get a good round, you need to prove three things: that you're committed, that you've studied the market and customers, and that you truly believe in your idea. You should aim to raise enough money for 2–3 years, while keeping control and not giving away too much of your company. The guide also shares smart ways to attract investor interest, how to prepare a great pitch, and how to stay in control during the process. It even includes tips on picking the right investors and when (or if) to tell the world you raised money.

Key Takeaways from the article

  • Only raise money if you want to build a big company fast
  • You need to prove your idea, your research, and your full-time commitment
  • Don’t raise too early or too much-it can hurt your focus
  • Most seed rounds raise $2M–$4M and sell 10%–20% of the company
  • Plan a short fundraising window to create urgency and interest
  • The pitch should be simple: big problem, big market, and why you’re the one
  • Get warm intros from trusted people to open investor doors
  • Practice your pitch with less important investors first
  • Start small by taking checks from angels to build social proof
  • Don’t lie or exaggerate in the process-trust builds better results
  • Choose investors who you’d want to work with for years
  • Only announce the round if it helps with hiring, press, or customers
  • Focus on building a great business first-funding follows strong execution

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