Most entrepreneurs raising a seed round of financing just want to get money in the door quickly so they can build their business.
However, Mike Collett, Managing Partner of Promus Ventures points out that getting the RIGHT investors in your seed round is debatably the most important round of investor selection for your company. The investors that participate in your seed round pretty much set the stage for all future rounds of financing. In a recent article, Mike points out that your seed round “…marries you to a group of investors that have the ability to either catapult your company many months forward or make your life miserable”.
We couldn’t agree more. Getting the RIGHT investors in your company at the right time is the foundation what we do here at SmartMoney Startups. We help entrepreneurs build a Target List of the right investors from the very beginning. This is the fastest way to find a high quality lead investor that can catapult your company into the big leagues quickly. And once you get a high quality lead investor, it will be much easier to get other investors to follow.
Mike Collett posted a very well written article describing how to structure your seed round on Medium.com, and I encourage you to take a look at his outline for structuring the deal.
I also encourage you to build your own Target List of SmartMoney Investors. SmartMoney investors are people who have already had successful investments and exits in the vertical market where your company operates. If you don’t have a target list of who these investors are, your networking efforts are going to lead down alot of dead end roads. Your time is way too valuable to spend it in pitch meetings with the wrong investors. You already have a full time job building your company, so naturally you want to be laser focused on getting in front of the right investors instead of wasting time pitching people who don’t “get it”.
One entrepreneur who raised money said “I wish we had put more thought into constructing our seed round. We let investors in early that ended up not being helpful. Worse, they took the spot of others who wanted to invest but ultimately we ran out of room. We were so focused on getting the capital in the door that we settled on the good but not the great. (audible sigh).”
Don’t be “that guy” or “that gal”. Be laser focused on finding the BEST investors for your startup company by building a Target List of SmartMoney Investors.
To learn more about how to build a Target List of SmartMoney Investors and get warm introductions to them, register for our free webinar “Fast Track Your Startup Fundraising” here.
Mike Collett is Founder & Managing Partner of Promus Ventures. His original article is posted here on Medium.
Jeff (J.D.) Davids is Founder & Managing Partner of SmartMoney Startups.
