How to get seed capital to start a startup

You have a company and no employees. Everything you own is a promising business idea. This requires funding: the so-called seed capital. At this stage, raising money is a challenge that requires perseverance, foresight, and persuasion.

It all starts with seed capital

While it is possible to find differing definitions of what seed capital means, there is consensus as to the stage at which the company resorts to this type of investment: after InvestopediaAre the beginning in the phase of conceptionwho have yet to explore the market and lack the resources to develop the product. Generally this money is used to put down the idea that covers that on paper initial expenses of business. The seed capital is used to sustain the company as it grows until it is self-sustaining and attracts the attention of larger investors. Because of this, it is common when the money is not sourced directly from the owners of the business family, friends or acquaintances invest in the idea because of the proximity to the mentors of the idea – and not exactly because of the return potential of the app.

This is not always the ideal solution. “Everything has a price and even our friends’ money can be problematic. Although it’s not the same financial austerity and the bureaucracy from others financingthe investments of family and friends have their own characteristics,” warns professor and consultant Tom McKaskill in his book An Introduction to Angel Investing. The main problem with borrowing money from friends is the risk of investing clumsiness in the relationship, Aside from the possibility that the investment doesn’t pay off and you end up owing money to the person you live with, which can be quite difficult.

This is how you receive start-up capital to finance your idea

Professional investors, development agencies, government agencies and banks consider seed capital as a risky investment precisely because there is only one idea and there are no sure guarantees of the return on funding. That’s why you need a good skill to do it conviction: Without the opportunity to talk about and defend your idea, it will be difficult to convince anyone to invest. Learn some tips to make access easier seed capital to you beginning then.

dedicate yourself network

Create a body network of contacts It can be the first step to get the long-awaited seed capital. Don’t stop attending events and seminars related to your field of activity: put aside your shyness and try to sell your fish. For Gagan Giyiani, Co-Founder and President of udmy, A company that invests in educational content needs commitment to build a network of contacts. “I went to every conference I could and pretty much killed myself at every one. I approached as many entrepreneurs as possible and always tried to expand my contacts. I rarely ate dinner on those occasions,” he says on the company’s official blog.

get a prototype

Use whatever resources you have initially to build or set up some sort of prototype business model. The idea alone won’t convince investors — no matter how much risk they’re willing to take, they need something concrete to trust you.

Shows growth potential

When approaching investors or agencies, act like an entrepreneur, not an adventurer. It is important to explain who you will be working with and how you intend to do it pay the money. You should be prepared to answer virtually any type of question, even one that might make you uncomfortable or humiliating.