When is the right time to raise a seed round?
Hello fellow Indie Hackers.
From your experience, what kind of traction does an early stage startup need to show to constitute enough traction to start raising a seed?
I ask because I hear widely varying answers from "don't talk to angels/investors until you're at $10k MRR" to "whenever you have initial users and make your first dollars" to go for it.
As you can imagine, it can be a tad confusing. I'm sure the answer varies based on the startup and their category, but is there a particular trend that suggests when it's appropriate for a startup to begin raising a seed?
For context, I'm in the latter situation with very early signs of traction with user growth, and I made my first sale through my platform last month (yay!). I still consider myself super early though, and haven't thought to approach anyone for funding yet, but I could be wrong.
Your thoughts on when is the appropriate time?
Hey @marktuff
Re: Traction - I wish there's a golden answer. It depends on industry, market, product and so on.
And Re: your second statement. I personally don't think $10k MRR is good or bad. Because there's almost no standard. And spending too much time on benchmarking will distract your growth.
A trend would be like when you stop asking this question :)
There's never too early or too late when it comes to reaching out investors. But the thing is, don't pitch, try to build relationship with investors.
My firm and I investing pre-A to series A and we always rely on recommendation from community, accelerators etc. Maybe a route that you can consider?
Besides, I made VenturesList to answer questions from early-stage founders. Hopefully it's useful.
Hey @felix12777 thanks for the message here.
Sounds in some ways like product market fit. If you have to ask, well... ha. Clearly some differences, but just saying. Some great points and I've gotten some good answers offline as well recently regarding this subject. I think I just need to build the rapport at this point and get my feet wet with investors, meet people, and perhaps just keep them updated on my project and where I'm at without being a car salesman. As you say, build the relationship.
I'm absolutely interested in the accelerator route however it's been difficult for me to break into those as the ones I like place a fairly large emphasis on team and right now it's still just me, though I could be adding at least one more people in the next month to the effort.
Side note, I clicked a link to your Twitter and saw you're a proponent of no code. I actually built my MVP in bubble. I'm a huge fan. Nice work on your sites BTW, among the best design I've seen in a no code environment. And thank you for sharing your project, very cool!
Hey @marktuff
Having a team is almost the first consideration when it comes to startup investment, whether or not you're joining an accelerator or raising seed money.
It's possible to raise capital with a team of one, but the chance is small. Just one simple hypotheses: If you're not available, who would make the decision for your company?
When I work for Techstars, we pick a startup based on 6 checkboxes: team, team, team, idea, market, traction.
If you have the courage to pitch investors, pitch a partner too.
Thanks for stopping by my profile and I'm glad to hear you're also a fan of nocode! Let's make sure we exchange opinions!
Hi @felix12777 I appreciate it.
Cool to hear you're involved with Techstars.
I applied to Techstars Boston last month but unfortunately didn't get in. I saw the huge emphasis on team and it almost scared me off from applying, but figured what the heck why not try.
I suppose part of my gripe with the emphasis on team is should there also be an emphasis on how well a founder is able to execute and build an amazing team with the appropriate resources? I can probably guess why having an initial team matters, but was wondering your thoughts on the matter.
Definitely would like to stay connected!
Yea totally. You not only need to be a good product maker. You also need to demonstrate your leadership skills, culture management etc
If you believe your company and product. Your customers will come.
Same concept applies to talents, partners and investors.