Seed Funding Preparation: 10 Steps to Get Investor-Ready

You've got an idea, maybe some early traction, and you're ready to raise your first real round of capital. Seed funding is the starting line for most venture-backed startups—but it's also where many founders stumble.

The difference between founders who close their seed round in 6 weeks versus 6 months usually comes down to preparation. Not luck, not connections (though those help), but having your house in order before you start knocking on doors.

This guide walks you through the 10 steps to prepare for seed funding, based on my experience helping dozens of first-time founders navigate their first institutional raise.

Understanding Seed Funding in 2024-2025

Before diving into preparation, let's level-set on what seed funding looks like today:

• Typical round size: $1M-$4M (with some going higher for AI/deep tech)
• Valuation range: $5M-$20M pre-money
• Lead investors: Seed-stage VCs, super angels, or angel syndicates
• Timeline: 2-4 months from first meeting to close
• What investors expect: Strong team, clear problem, early validation, big market

Unlike pre-seed (which often funds an idea), seed investors want to see evidence that something is working—even if it's small.

Step 1: Validate Your Problem and Solution

Before raising money, make sure you're solving a real problem:

Problem Validation Checklist

• Have you talked to 50+ potential customers?
• Can you describe the problem in the customer's words (not your words)?
• How are people solving this problem today? What's broken about current solutions?
• Are customers actively looking for alternatives?
• Will customers pay to solve this problem?

Solution Validation Checklist

• Have customers used your product (even a basic version)?
• Do customers come back and use it again?
• Are customers willing to pay? At what price point?
• Have customers referred others?

Investors will ask: "What have you learned from customers?" Have specific answers with data.

Step 2: Assemble Your Founding Team

At seed stage, investors bet heavily on the team. They're asking:

• Why is this team uniquely qualified? Domain expertise, technical skills, previous startup experience
• Is the team complete? For most startups, you need a builder (technical) and a seller (business)
• Will this team persist through hard times? How long have founders worked together?
• Can they recruit great people? Early hires signal team-building ability

Common Team Red Flags for Investors

• Solo founders without plans to add co-founders
• Founding teams that just met
• Missing critical skills (no technical founder for a tech company)
• Founders with very different equity splits without clear justification

How to Strengthen Your Team Story

• Document your co-founder working history
• Highlight relevant domain expertise
• Show evidence of recruiting ability (advisors, early hires)
• If you have gaps, acknowledge them with a plan to fill

Step 3: Build Your MVP and Show Traction

"Traction" at seed stage doesn't mean millions in revenue. It means evidence of progress:

Types of Seed-Stage Traction

• Revenue: Even $1K-10K MRR shows customers will pay
• Users: Active users, especially with retention
• Waitlist: Significant interest (5,000+ is compelling)
• Pilots: Enterprise customers testing your product
• Letters of Intent: Written commitment to buy if you build X
• Design partners: Customers co-developing the product

Traction Thresholds That Get Attention

The key is momentum. Investors want to see that things are moving in the right direction.

Step 4: Define Your Market Opportunity

You need to convince investors that your market is large enough to build a venture-scale business ($100M+ revenue potential):

Market Sizing Framework

• TAM (Total Addressable Market): The entire market if you had 100% share
• SAM (Serviceable Addressable Market): The segment you can realistically reach
• SOM (Serviceable Obtainable Market): What you can capture in the next 3-5 years

How to Build a Bottom-Up TAM

Top-down market sizing ("It's a $50B market") is lazy. Build bottom-up:

1. Number of potential customers in your target segment
2. Average annual contract value you can charge
3. Multiply: Customers × ACV = Your TAM

Example: 50,000 mid-market companies in the US that need your solution × $10,000/year = $500M TAM

Show the Path to $100M Revenue

Investors model their returns based on exit value, which correlates with revenue. Your pitch should show:

• How you get to $100M ARR
• What market share that requires
• Why that's achievable

Step 5: Create Your Pitch Deck

Your seed deck should tell a compelling story in 10-12 slides:

Essential Slides

1. Title: Company name, one-liner, your name
2. Problem: The pain point (be specific, use customer quotes)
3. Solution: Your product and how it solves the problem
4. Product: Demo or screenshots showing the experience
5. Traction: Evidence of progress (metrics, customers, growth)
6. Market: Size and why now
7. Business Model: How you make money
8. Competition: Landscape and your differentiation
9. Team: Why you're the ones to build this
10. Ask: How much you're raising and use of funds

Deck Best Practices

• Keep it visual—less text, more images and charts
• One key message per slide
• Have a narrative arc: Problem → Solution → Proof → Opportunity
• Practice delivering it in 5 minutes

Step 6: Prepare Your Supporting Materials

Beyond the deck, have these ready:

One-Pager

A single-page summary for quick review. Include:

• Problem and solution (2-3 sentences each)
• Key metrics
• Team bios
• Raise amount and use of funds

Financial Model

For seed stage, a simple 2-year model is sufficient:

• Revenue projections with assumptions
• Key cost drivers
• Monthly burn rate
• When you'll need to raise again

Keep it simple. Sophisticated 5-year models aren't necessary at seed. Learn more about building financial projections for investors.

Demo

If you have a product, prepare a 3-5 minute demo that shows:

• The core user flow
• The "magic moment" where value is delivered
• Real customer data if possible

Step 7: Build Your Investor Target List

Not all investors are right for your company. Build a targeted list:

Criteria for Your List

• Stage: Must invest at seed stage
• Check size: Matches your round size
• Sector: Invests in your space
• Geography: Invests in your region
• Portfolio: No conflicts (competitive investments)

Building the List

1. Research 100+ potential investors
2. Narrow to 50 who are a strong fit
3. Prioritize 20 "tier 1" targets
4. Find warm intro paths for each

Resources for Research

• Crunchbase, PitchBook for investment history
• Twitter/LinkedIn for investor interests
• Portfolio company founders (ask for feedback)
• Investor blogs and podcasts

Step 8: Line Up Your Warm Introductions

Cold outreach rarely works for seed funding. Warm intros are essential:

Best Intro Sources (in order of effectiveness)

1. Portfolio founders: Founders the investor has backed
2. Other investors: Angels or VCs who know them
3. Advisors/mentors: Industry people they respect
4. Accelerator network: YC, Techstars alumni/partners
5. Second-degree connections: LinkedIn mutual connections

How to Ask for an Intro

Make it easy for your connector:

• Write a forwardable email (2-3 paragraphs max)
• Include your deck link
• Explain why this specific investor is a fit
• Ask: "Would you feel comfortable introducing me?"

Don't ask people to vouch for you unless they really know your work.

Step 9: Get Your Legal House in Order

Before raising, clean up potential legal issues:

Essential Legal Setup

• Incorporation: Delaware C-Corp is standard for VC-backed startups
• Founder agreements: Equity splits, vesting schedules, IP assignment
• Cap table: Clean and accurate (use Carta, Pulley, or Captable.io)
• IP protection: Patents filed if applicable, trade secrets documented
• Employment agreements: For founders and early employees

Common Legal Red Flags

• Messy cap table from early angel rounds
• Missing IP assignments from contractors or co-founders
• Unusual incorporation structure
• Existing investors with blocking rights

Step 10: Set Your Fundraising Timeline

Plan your raise strategically:

Optimal Timeline

• Preparation: 4-6 weeks before starting meetings
• Active fundraising: 6-12 weeks
• Closing/legal: 2-4 weeks

When to Start

Begin fundraising when you have:

• 6+ months of runway remaining
• Recent traction wins to share
• Bandwidth to focus on fundraising (it's nearly full-time)

Running the Process

• Schedule meetings in batches (5-10 per week)
• Create momentum with early commitments
• Set a soft deadline to force decisions
• Track everything in a CRM

The Pre-Seed Fundraising Checklist

Before your first investor meeting, verify:

• ☐ Problem validated with 50+ customer conversations
• ☐ MVP or prototype built
• ☐ Early traction (revenue, users, or LOIs)
• ☐ Founding team complete (or plan to complete)
• ☐ Market opportunity clearly articulated
• ☐ 10-12 slide pitch deck polished
• ☐ One-pager and basic financial model ready
• ☐ Target investor list of 50+ names
• ☐ Warm intros lined up for top 20 targets
• ☐ Delaware C-Corp incorporated
• ☐ Cap table clean and documented
• ☐ 6+ months runway to run the process

FAQ

How much should I raise in a seed round?

Raise enough to hit clear milestones that will get you to the next round (usually Series A). For most startups, this means 18-24 months of runway. Calculate your monthly burn, multiply by 24, and add a buffer. Typical seed rounds are $1M-$4M, but this varies by market and business model.

What valuation should I expect at seed?

Seed valuations typically range from $5M-$20M pre-money, depending on traction, team, and market. As a rule of thumb, raising $2M at a $10M pre-money valuation (20% dilution) is common for a strong seed deal. Don't optimize too hard for valuation—the right investor at a fair price beats a high valuation from the wrong investor.

Should I use a SAFE or priced round?

SAFEs (Simple Agreement for Future Equity) are faster and cheaper for smaller raises ($500K-$2M). Priced rounds give investors more rights and are standard for larger seed rounds ($2M+). If you're raising from one or two investors, a priced round may be appropriate. If you're assembling many small checks, SAFEs are more efficient.

Getting Professional Support

Raising your first round is complex. Consider working with:

• A Virtual CFO to build your financial model and handle due diligence
• Fundraise preparation advisors to sharpen your pitch and run an efficient process

Conclusion

Seed fundraising isn't about having the perfect pitch—it's about being prepared. Investors can tell when founders have done the work versus when they're winging it.

Use this checklist to prepare methodically. Get your materials right, build your target list, line up your intros, and then execute with focus. The founders who raise quickly are the ones who prepared thoroughly.

Amit Patel is a startup advisor with 12 years of experience working with early-stage companies on fundraising, financial strategy, and growth. He has helped dozens of first-time founders successfully close their seed rounds.