Martin Zwilling | AlleyWatch
Even if you are like me and you work every day in the world of new-venture funding, the options are confusing, and their meanings seem to change on a regular basis.
Asking for early-stage money before you have customers and revenue will likely kill your credibility with real investors.
Seed-stage, meanwhile, is technically that critical period when you need funding to do solution-and business-model development to prove that your new product or service works, before you try to sell it to customers. Most investors won’t touch a first-time entrepreneur at this stage.
Luckily, there are some new entrants and approaches to seed-stage funding—if you know whom to ask—that can supplement the friends, family and bootstrapping approaches traditionally recommended.
Here are 7 options for you:
- A crowdfunding campaign. Crowdfunding is rapidly becoming the major source of funding for seed-stage startups. According to recent statistics, there are already more than 500 online crowdfunding platforms available (i.e. Kickstarter); and over $5 billion was raised this way last year.
- A seed-stage “super angel.” This is a relatively new term loosely applied to angels who invest their own money in a portfolio of startups (typically 20 or more) and are willing to lead multiple rounds, usually starting with a seed round.