Seed funding for startups in India

What seed funding is

Seed comes after pre-seed and before Series A.

You have a product that people use. You may have first revenue.

The money pays to find a way to grow that repeats. Hire the first team. Test your channels. Learn what customers pay for.

A seed round may be a SAFE, a note or priced shares.

Seed money can come from angels, angel networks and early stage funds. Grants can add to it.

Are you at seed?

• Your product is live and people use it.
• You can show usage or revenue month by month.
• You know who your first customers are.
• You need money to find a channel that repeats.
• Your next goal is product market fit.

Still building the first version? Read the pre-seed page.

How a seed round is written

• A SAFE or a note, which may carry a price cap.
• A priced round, with shares at a set price.
• In India, priced shares may be CCPS. These convert to equity later.
• A lead investor sets the terms. Others join on the same terms.
• Pro rata rights let early investors keep their share in later rounds.
• A grant can add money without new shares. Check its terms.

How to raise a seed round

1. 1Show what changed since your last raise.
2. 2Pick the numbers that prove users want it.
3. 3Set a raise that funds your next milestones.
4. 4Model the round in your cap table first.
5. 5Check how any earlier SAFEs will convert.
6. 6Update your deck with the slides below.
7. 7List investors who back seed in your sector.
8. 8Ask one investor to lead the round.
9. 9Write from your own mailbox. Track every reply.

Questions to answer before you pitch

• What do you know now that you did not at pre-seed?
• Which numbers show that users want it?
• Which channel will you test with this money?
• Who will you hire first, and why?
• What must be true to raise Series A?
• How long will the money last on your plan?
• What will you stop doing after this round?

Papers to have ready

• A clean cap table with every SAFE and note.
• Monthly numbers: users, revenue, burn and cash.
• Customer proof: contracts, pilots or usage data.
• Your company documents and board minutes.
• An option pool plan for your first hires.
• Founder vesting, if it is not in place yet.

Mistakes to avoid at seed

• Raising seed with no clear use for the money.
• Letting SAFEs pile up without a cap table.
• Hiring ahead of proof that the channel works.
• Picking a lead only on the price.
• Going quiet with investors between rounds.
• Raising on a story with no numbers behind it.

Before you raise Series A

• Show growth month by month, with the source.
• Know what a new customer costs you.
• Know how many customers stay, and why.
• Keep your financials up to date each month.
• Set up a data room before you need it.
• Hire leaders only where the plan needs them.
• Keep a list of investors who said not yet.

Questions founders ask