How Many Seed Investors Should we Approach
We are building a startup, we are a few weeks away from our MVP launch. We have had some initial positive investor conversations with an angel and a couple VCs. One large VC that generally doesn't do seed funding suggested that they would introduce us to seed stage investors who they have worked with and respect.
My question is, should we limit the number of people we talk to about investing. I suspect the time commitment could get out of hand if we do too many of these meetings, but obviously we want to give ourselves the benefits of more alternatives.
Appreciate any thoughts,
Funding Investors Seed Funding
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I would approach many and engage with a few. Spend time finding out if there's a chance they're even interested and move on quickly if they're not (they might later so don't burn bridges). Only engage if you think there's a reason they're interested. Ask if what you do is a space they're interested in making an investment. – Frenchie 13 years ago
2 Answers
This is a little like asking "How many places should I look for my life partner?" The answer is keep looking until you find the right one.
The same thing with investors, don't just stettle for the first one that comes along, keep looking until you find one you feel comfortable with and with whom you can live.
Before talking to potential investors it is important for you to think about what exactly you want from an investor, generally it should be more than just money.
You may want to take a look at this question: What is the most important way in which an investor can add value to your startup?
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This is helpful. Thanks, the large VC was early in a number of startups with successful recent exits and others in the portfolio where our contact is on the board have analogous models in different markets. He had great ideas -- does that mean we stop there? – Dmoore 13 years ago
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Perhaps, it is hard to say. It depends on your sense of urgency and how hard it would be to at least meet with one other investor. Each case is unique. – Jonny Boats 13 years ago
Get 2-3 investors (VCs) interested. If you have only one it will be harder to negotiate on the termsheet and your valuation will be lower. Besides it's better if you can choose between 2 or 3 offers (with each its own termsheet). Do not mention who are they competing with, otherwise they will group up and lower your valuation...
