WHAT IS PRE-SEED FUNDING? WHY IS IT IMPORTANT FOR YOUR STARTUP?
Funding is the oxygen of every startup required at various stages of a startup, depending upon the development of their product or services. Accelerating business growth is one reason for raising funds.
Startups in their product development stage and those not generating enough revenue can raise pre-seed funds to take their business off the ground.
PRE-SEED FUNDING MEANING
Pre-stage funding is the earliest stage of funding that is so small that many do not consider it an official round of funding.
The main purpose of this stage of funding is to build a base of the founder’s idea by carrying out the operations necessary to develop it into a business. These necessary operations include validating the assumption they are working on by conducting market research, interview, prototype testing, and developing a minimum viable product (MVP).
Another purpose of pre-stage funding is to get key stakeholders to get involved in your business to fill the skill requirements gap your startup has.
It is also necessary to get your startup registered, get the industry-specific licenses, and have intellectual property rights like copyright, trademark, etc. for your company.
IMPORTANCE OF PRE-SEED FUNDING
● Investors who will invest in your startup will assume the risk associated with your startup.
● In pre-seed funding, there is no burden of debt is present as investors accept equity in our company in return for their investment.
● The company agreements under seed- funding are flexible.
● Many times, investors impart their field knowledge to the startups they invest in.
● Connecting with these investors opens a lot of other networks to you as a startup.
FIRST FUNDING: PLATFORM HELPING STARTUPS IN THE PRE-SEED STAGE
First funding is a platform that helps startups raise pre-seed funds by providing insights, knowledge, and expert team specific to this stage of funding them. It also acts as a connecting platform between startups and investors.
It makes the pre-stage funding less complicated for startups and investors.