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How to raise seed funding?

HOW Question

Quick Answer

Raise seed funding by building MVP with traction (₹5L+ MRR or 10K+ users), creating compelling pitch deck, getting warm introductions to VCs, pitching 50+ investors, and negotiating best terms. Process takes 3-6 months. Target ₹2-10 crore at ₹20-100 crore valuation.

Detailed Explanation

Step-by-step seed fundraising: (1) Build fundable traction—Minimum: Working MVP + 5K users or ₹2L MRR. Better: 20K users + 50% MoM growth or ₹10L MRR. Don't pitch too early (wastes relationships). (2) Create killer deck—10 slides: Problem, Solution, Market, Traction (most important), Team, Business Model, Competition, Financials, Ask. Focus on metrics that matter: revenue growth, retention, unit economics. (3) Build target investor list—Research 50+ VCs who invest in your stage, sector, geography. Use Crunchbase, Tracxn to see their portfolio. Target VCs who funded similar companies. (4) Get warm intros—Cold emails have 2% response rate. Warm intros have 50% meeting rate. Ask portfolio founders, accelerator alumni, angel investors for introductions. (5) Perfect your pitch—Practice 50+ times. Anticipate objections. Know numbers cold (CAC, LTV, burn rate, runway). Record yourself, watch for filler words, weak body language. (6) Start pitching—Send deck + intro, follow up after 3 days, schedule 30-min calls, nail pitch, handle objections. Expect 20-30 meetings for 2-3 term sheets. (7) Run parallel process—Pitch multiple VCs simultaneously. Creates FOMO, competition, better terms. Never single-thread. (8) Negotiate terms—Compare term sheets on valuation + terms (liquidation preference, board seats, anti-dilution). Pick best investor, not just highest valuation. (9) Due diligence—Investors audit financials, customer references, legal docs. Takes 2-4 weeks. Be transparent. (10) Close—Sign SHA, get money wired. Timeline: 3-6 months start to finish.

Real-World Examples

Successful raise: Had ₹8L MRR, pitched 40 VCs, got 4 term sheets. Chose Sequoia (not highest valuation but best brand + support). Raised ₹8 crore at ₹50 crore valuation. Closed in 4 months.

Failed raise: Pitched with just idea (no MVP). VCs said "come back when you have traction." Wasted 6 months, burned through savings. Should have built first.

Bootstrapped alternative: Founder built to ₹1 crore ARR without raising. Raised Series A directly at ₹500 crore valuation. Saved huge dilution (no seed round).

Key Takeaways

  • Don't pitch until you have meaningful traction (₹5L+ MRR or 10K+ users)
  • Warm intros are 25x more effective than cold emails
  • Pitch 50+ investors in parallel—creates competition for better terms
  • Process takes 3-6 months—start when you have 12+ months runway
  • Choose investor for value-add, not just highest valuation

Frequently Asked Questions

How much traction do I need before raising seed?

Minimum: MVP + 5K users OR ₹2L MRR. Ideal: 20K+ users with growth OR ₹10L+ MRR. Without this, VCs will say "too early."

How long does seed fundraising take?

3-6 months typical. 1 month: Build list, get intros. 2 months: Pitch meetings. 1 month: Term sheets, negotiate. 1-2 months: Due diligence, close.

What if no VCs are interested?

Either (1) Too early—build more traction, or (2) Wrong market/execution—pivot or improve product. Don't force fundraise, bootstrap longer until metrics improve.

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How to raise seed funding? - Complete Answer (2025) | startupideasdb.com