Raising a seed round is unusual activity.

Most VC will be involved in dozens (or hundreds) of seed investments, whereas most founders will only do it once in their life. This asymmetric experience favours the investor, not the founder.

I'm not a VC, I'm a founder, so read this with a grain of salt. I'm won't qualify the advice except to say that this has worked for me and several companies I've advised. Some companies I helped were YC companies who were struggling to get even a single check, and then used these tactics to close $2M+ seed rounds. (Despite popular opinion, not all YC companies manage to raise a round.)

# Focus on the fundamentals

Remember is that your business comes first. Ideally you don't need to fundraise at all. This advice is for when you do decide to raise (for whatever reason, there are many).

Also, raise the round and get back to work. Don't get addicted to the process. Don't over-raise and dilute your share of the company more than necessary.

# Seed investing is irrational

To generalize completely, "Seed VCs" will invest in your startup based on some internal weighting of these things (probably in this order):

  1. Successful exit / multiple founder
  2. Team
  3. Traction
  4. Recommendations / referrals
  5. Product
  6. Market size

They won't analyse your financial statements (and if they do, run) so don't waste time with them.

That being said, these aren't the most important things to worry about for fundraising. What is? FOMO. Seed investing is a game of mimetics.

# Mimetics

Human are victim to a strange phenomenon: we only desire things because we notice that someone else desires it too.

Have you ever "suddenly" become attracted to someone who you didn't previously find attractive, simply because your friends find them attractive? That's mimetics. We want what other people want, especially when we know there is limited access to that thing.

Since seed rounds are irrational, we can use mimetics to our advantage. The better you can use this principle, the easier your fundraise. Your goal with fundraising is two-fold:

  1. Make it appear that every that everyone wants to invest in the round.
  2. Make it appear that the investor might miss.

Notice that I didn't say "invest in your business" for 1. Think of the fundraise as a completely separate activity to the business. Concentrate on selling the "round" as much as selling the product/business.

If you can internalise only one thing from this article, make it mimetics. If you can manage this, you will have no problem raising a seed round.

# Tactics

Let's use a hypothetical company to discucss tactics.

  • You start a company called Widgets, Inc..
  • you are going to raise $1M. it's a nice even number
  • imagine it's January. you want to close the round in July.

Month 1: Raise from angels

  • close a small check from family/friend.
  • "we are raising

Month 2: coffee meetings with VCs

  • "We will raise a round in September" - later than you actually want
  • Right now we are raising from angels.
  • If you like the person, meet again. Try to get 5 that you like.

Month 4: coffee meeting

  • meet more angels, start closing $250K.
  • meet with them again, reiterate that you will raise in September

Month 6:

  • Reach out to them again and tell them the round is heating up.
  • Schedule all initial meetings first week
  • schedule all partner meetings in the next week.

Initial meetings

  • we're raising $1, and we've closed $250.
  • we're still debating
  • We're meeting with some of our favourite investors,