Questions

How to find a lead investor for a seed round?

2answers

If you feel you're ready to raise a seed round, there are a handful of seed stage funds that like to lead deals. Here they are in no particular order:

Harrison Metal
Homebrew
Floodgate
Felicis
Freestyle
SoftTech
Baseline
MHS
Fuel Capital
First Round
Boldstart
True Ventures
CRV

You want to figure out how to get meetings with Partners at as many of these funds in the most concentrated period of time possible. The concentration of time matters significantly. The worst thing you can do in a seed raise is have time drag on, as it's a negative signal and decreases your leverage.

In terms of how to get access to partners, the best way is through someone they know and trust, probably the easiest way is through companies they have already invested in.

But here's the mistake I see time and again: Entrepreneurs often don't fully research each investors' portfolio looking for potential conflicts or similar companies that have failed. Look closely and only approach the investors where you know there's no conflict or "dead bodies."

From a process perspective, if you don't get a follow-up from them within 2 weeks, you should consider them a pass, unless they set expectations of a longer time-frame and the next step should be a partner meeting or meeting at least one other partner in the next meeting,

Hope this helps.


Answered 5 years ago

Finding a lead investor is a critical part of any startup fundraising campaign. Unfortunately, it isn’t a factor many entrepreneurs really give much thought too until they are deep into their efforts.

As per Forbes Magazine, Securing a lead investor is vital for 99% of startup fundraising rounds. Without one you may not get any traction. You may just spend months spinning your wheels before having to go back to the drawing board. Those are precious hours that are being sucked away from your ability to code and market and clock up real customers and sales.

If you’ve already attempted to pitch or raise money there is a good chance you’ve already been told to come back when you get a lead investor. Most VCs, angels and angel groups are all going to want to know who your lead is. It may be one of the first questions they ask. Few want to go first. Yet, after you secure this position everything can fall into place like a line of dominos.

In fact, once you have a lead you should include the terms and the capital that you are raising in your pitch deck with a reference to the individual or institutional investor that has priced the financing round as social proof. This will help to increase credibility and trust with prospects.

If you wish to learn more, feel free to setup a call.


Answered 7 months ago

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