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| Understanding Seed Funding and Tips for Finding Startup Investors |
For those of you who own a startup, you should understand the seed funding strategy to develop your business. What is seed funding?
Not only actively investing, many of today's young generation in the digital era are also actively utilizing technology to create innovations as solutions to problems around them. So it's no wonder that many technology-based startups have emerged, commonly called startups.
However, starting a new business, especially one based on technology, requires a lot of capital. One way to get this capital is through seed funding or initial funding. Seed funding, or initial funding, is a crucial stage for new startups to get initial funding.
If you are a startup entrepreneur, it is important to understand the ins and outs of seed funding and prepare yourself thoroughly. Well, in the following article, we will discuss seed funding in depth, starting from the definition, purpose, stages of seed funding, to surefire tips for attracting investors and paving the way for the success of your startup company. So, let's read this article to the end!
What is Seed Funding?
Seed funding is the initial stage of funding carried out by a startup or new company. This funding usually comes from private investors, angel investors, venture capital (VC), or it can also be crowdfunding. Investors who provide seed funding to a startup will usually ask for compensation in the form of equity (shares) in the company.
The amount of funds obtained from seed funding generally ranges from IDR 500 million to IDR 10 billion. These funds are used to finance various startup needs in the early stages, such as:
1. Product or service development: Building prototypes, conducting market research, and perfecting products or services before launching.
2. Team formation: Recruiting the best talent to fill important positions in the startup, such as programmers, designers, or marketing.
3. Marketing and branding: Increasing brand awareness and attracting consumer interest in the products or services offered.
4. Infrastructure: Building IT infrastructure, renting offices, and purchasing equipment needed for business operations.
Seed Funding Goals
The main goals of seed funding are to help startups in:
1. Validating a business idea: Testing the viability of a business idea in the market and ensuring that there is demand for the product or service being offered.
2. Developing a minimum viable product (MVP): Building a basic version of a product or service that can be used to test consumer interest and get feedback.
3. Building a core team: Recruiting the best talent who share the same vision and mission as the startup founders.
4. Attracting investors at a later stage: By showing significant progress with seed funding, startups will find it easier to attract investors at a later stage of funding, such as Series A or Series B.