Everything early-stage founders need to know before pitching their first round
If you’re building a startup, chances are you’ve come across the term “seed funding.” It’s one of those phrases that gets tossed around like everyone knows what it means. But when you’re just starting out, it can feel like everyone else has the rulebook and you’re still trying to find the field.
So let’s break it down. What is seed funding, really? Why do some startups get it easily while others struggle? And how can you give yourself the best shot in 2025?
Let’s start with the basics
Seed funding is usually the first official round of capital that a startup raises from external investors. It comes after the bootstrapping phase, when you’ve already built something small, maybe even tested it with a few users or customers.
At this stage, investors aren’t just backing your product. They’re backing you. Your team, your thinking, your ability to spot a problem and build a solution around it.
Seed money helps you do a few things:
- Build out the product properly
- Hire the first critical team members
- Start acquiring customers
- Run small growth experiments
- Extend your runway to keep learning
Most seed rounds in 2025 range from $500k to $3 million. But more important than the number is why you’re raising.
What investors want to see in 2025
Gone are the days when a shiny pitch deck and a bold claim could land you millions. Post-2023, investors have become much more focused on fundamentals. They’re still taking risks, but they’re looking harder at the shape of that risk.
Here’s what they tend to care about now:
- Clear pain point. What problem are you solving, and who feels it the most?
- Evidence of demand. This doesn’t have to be revenue, but it can’t be hand-waving either. Real signals from users, pilot customers, or early traction matter.
- Thoughtful use of capital. Investors want to know how every dollar will be used. Hiring five engineers without a clear plan? That doesn’t fly anymore.
- A balanced cap table. Too much equity given away early can raise concerns. Investors want to see that you’re still heavily invested in your own outcome.
- Founders who know their numbers. Even at this early stage, basic financial awareness is key.
You don’t have to be perfect. But you do need to be prepared.
Where to find seed investors
There’s no single door to knock on, but here are the most common sources of seed funding in 2025:
- Angel investors: These are high net worth individuals who invest their own money.
- Micro-VCs: I see these as small venture firms that focus on pre-seed and seed.
- Venture studios and accelerators: Now very common they often provide capital plus hands-on support.
- Family offices: One that is often overlooked but are increasingly active in the early-stage scene, especially in specific industries.
- Strategic partners: Keep an eye out for some larger companies that offer seed investment to startups in their ecosystem.
And of course, there’s still friends and family. often the quiet backers who help get you to that first “investable” moment.
How to actually raise seed funding
Here’s what the process usually looks like, though the order can shift depending on the situation:
- Get your story straight. Before you reach out to anyone, understand your “why now.” Why this problem, why you, and why it matters in this moment.
- Build a pitch deck. It doesn’t have to be flashy, but it should be clear. Cover the problem, solution, market, traction, team, and how you’ll use the money.
- Create a target list. Don’t pitch every investor you can find. Focus on those who back companies like yours.
- Warm introductions. Cold emails can work, but warm intros from founders or advisors go much further.
- Prepare for questions. You will be challenged. That’s not a bad thing. Good investors test your thinking before they invest in it.
- Follow up and be consistent. Fundraising takes time. Be respectful, stay in touch, and don’t take silence personally.
It’s not just about raising money. It’s about starting a relationship that might last years.
One thing founders often forget
Seed funding isn’t the goal. It’s a tool.
Plenty of great startups never raise a cent. Others raise too much, too soon, and spend their way into trouble.
If you’re going to raise, do it with clarity. Know what success looks like for this round. Know what milestones you need to hit before the next.
And remember, saying no to the wrong investor is just as powerful as saying yes to the right one.
Getting ready to raise your first round?
I work with early-stage founders to shape honest, investor-ready pitches that match what seed-stage backers actually want to see. Please get in touch.