Raising a seed round of financing from a venture capitalist can be a challenging process for early-stage founders. Early stage venture capital is often subjective and irrational, making it difficult to understand without clear-cut answers.
This is why learning from others can be so helpful.To help you avoid some common mistakes, here are some of the things to keep in mind:
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Optimizing for valuation or unrealistically valuation expectations
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Pitching to growth investors for seed capital, or seed capital from growth investors
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Hiring the right resumes, wrong people
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Trying to make everything look perfect and hiding risks.
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Signing a term sheet before reviewing with a lawyer
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Don’t forget to do reference checks on board members
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Picking the right fund, but not the right partner
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Underestimating the amount of time it takes to fundraise
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Not optimizing for FOMO
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Being underprepared for due diligence
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Don’t fundraising when the business is not ready (if you can avoid it)
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Being secretive to the point that you lose trust
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Financials projections don’t exist, don’t match your story, are too optimistic or not optimistic enough.