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What are the stages of a startup? What they are and how they’re funded

• Introduction

Pre-seed stage

Early stage.

• Get started with Stripe 

Startups receive a massive amount of funding, globally. While venture funding—the largest source of capital for startups—declined in 2023, the second quarter of 2023 still saw around $60.5 billion in global funding . To understand how startups use this funding, you’ll need to familiarize yourself with the life cycle of a startup. From the earliest days of ideation and conception to the late-stage period of exponential growth and high revenues, each stage of a startup’s journey is funded in different amounts and from different sources.

While there are similarities between startups at the same stage—even when they are in different industries—startups move from stage to stage on different timelines. One company might go from the pre-seed stage to initial public offering (IPO) in five years, while another company might spend five years between raising its Series A and Series B funding rounds. And neither of these startups is more likely than the other to succeed in the long term. Moving a startup deftly through the stages of growth requires real-time analysis of the factors that govern your specific business, without relying too much on what other businesses have done.

Here is an overview of the stages a startup goes through, the top-of-mind concerns and goals for each stage, and how each stage is typically funded.

What’s in this article?

What are the stages of a startup?

The different stages of a startup’s life cycle can be broken down in various ways. Some might recognize just three broad stages: early stage, growth stage, and late stage. And while you could accurately place any startup into one of those categories, it’s more common to define the stages of a startup using a more detailed framework of five stages. This framework is oriented around the progressive funding stages that many startups go through.

Timelines can vary: one startup might spend years in one stage while another spends just a few months; others might skip some stages entirely. But startups within each stage share some important traits, which makes this framework useful for gaining a quick, high-level understanding of any given startup. Here are the stages, what startups focus on during each, and how they’re funded:

What happens: The pre-seed stage is the first stage of startup growth. In this stage, founders are defining the fundamental reasons why they’re forming their new business. They need to articulate what the business is, describe the problems they intend to solve, define their market differentiation, and create a plan to execute on their vision.

Some of the important questions to consider in the pre-seed stage include:

• What is the problem we’re hoping to solve?
• What is the solution we’re offering?
• What market opportunities exist around this problem?
• Who are the audiences experiencing this problem?
• Who else is currently offering a solution?
• How is our new solution different or better than what’s currently available?
• What does a minimum viable product (MVP) of this solution look like?
• What resources are needed to bring the MVP to market?

How pre-seed stage startups are funded: Personal financing, family, friends, accelerators, crowdfunding , pre-seed funds, and angel investors

What happens: The seed stage is all about validating the vision that the founders laid out in the pre-seed stage. This is where the team starts to test the core business idea, learn at each step of the way, and refine the approach. Most companies earn only a small amount of revenue during this stage, but the goal is to grow slowly while exploring the business direction.

For most startups, the seed stage focuses on the concept of product-market fit. Product-market fit means satisfying a need for a specific audience. It answers the question, “Does what we’re offering fit perfectly into its unique spot in the market?”

Product-market fit is a complex concept to apply to a specific business, which is partly why it’s the focus of seed-stage activity. Startups typically use seed-stage funds to prove that product-market fit exists—and then they use these proof points to raise additional funding during a Series A round in the early stage. But before startups can assess whether they are on the right track to achieving product-market fit, they have to define what that would look like and decide which performance metrics would accurately measure whether they’ve accomplished it. By the end of the seed stage, startups should have a strong idea of what to do, how to do it, and how to measure success.

How seed-stage startups are funded: Seed funds, syndicates, angel investors, venture capitalists (VCs)

What happens: While the seed stage is primarily about exploring and validating a startup’s approach to solving a specific problem for a specific market, the early stage is where startups execute their go-to-market (GTM) strategy, start commercially operating more fully, and grow revenue.

With a stronger understanding of the business needs and opportunity areas, startups usually hire more employees during this stage. The goal is to build on the seed stage to bring the business fully to life—and get it primed to scale.

How early-stage startups are funded: Early-stage funding rounds include the Series A and Series B, which are typically led by VCs and corporate VCs

What happens: Late-stage startups have operated for several years and become an established player in their market space, with considerable revenue. They are focused on two overlapping concerns: growth and an exit strategy. Late-stage startups are doing whatever they can to sustainably increase their valuation ahead of an exit. During this time, startups might explore some or all of the following growth methods:

• Diversifying the types of products or services they offer
• Breaking into new market segments that are adjacent to their primary market
• Acquiring other businesses, often smaller competitors or niche startups with specialized products or services that add a relevant new dimension to their own offering

How late-stage startups are funded: Late-stage funding rounds include the Series C and any subsequent series, which typically include investments from VCs, private equity firms, growth firms, corporate VCs, family offices, and sovereign wealth funds

What happens: There are two types of favorable exits a startup can have: an acquisition or an IPO.

Acquisition In an acquisition, one company is purchased by another company. When this happens, the company that is purchased, along with its assets and intellectual property, becomes a legal part of the company that purchased it.

IPO An IPO is what happens when a startup “goes public.” Startups are privately held, but after an IPO, they become publicly traded companies, and anyone can buy stock in them.

In both acquisitions and IPOs, the startup’s valuation sets the terms. During an acquisition, the valuation determines the sale price. When a startup goes public, its valuation at the time of the IPO determines what the stock price per share will be.

Valuation is based on revenue and growth, but there’s no formula that can universally determine every startup’s valuation. There are different ways to calculate a startup’s valuation, and agreeing on the right method is an important part of the negotiating process.

How startup exits are funded: Acquisitions are usually paid for with a mix of cash and stock. In the case of an IPO, a company stops being private, allowing the general public to purchase stock. Some IPOs are “funded” by one or more banks that put up money to buy the shares of a company just before it’s listed on the stock exchange.

More articles

• 10 legal requirements for starting a small business
• How to pick a name for your startup: A step-by-step guide
• How to scale a startup: A guide for strategic planning

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Seed funding for startups: the ultimate guide

What is seed funding.

• Advantages of seed funding
• Who invests in seed funding?
• When's the right time to raise?
• How much to raise?
• What equity to give
• How long does it take to raise seed funding?

How do you raise seed funding?

• How much revenue do you need to raise a seed round?
• Financing options
• How to find an investor

What documents do you need?

How do you choose a seed investor.

• Dos and don'ts

As an entrepreneur or startup founder, the question of how to fund your business is never far away – especially in those early days.

Seed funding is a common step for startups and it might be the right next step for you. But the exact process of raising a seed round can feel intimidating and mysterious unless you know what happens behind the scenes.

This guide is here to demystify that process, help you decide whether you're ready to pursue seed funding, and gain confidence about what to expect from the experience.

Seed funding is the first official round of funding that startups raise before moving into subsequent rounds, known as series A, B, C, and so on. Investors provide your startup with capital in return for gaining a stake in your company.

Initial funding for a new business often comes from the founders’ savings, or from friends and family. In fact, 77% of small businesses rely on personal savings at the beginning.

But in most cases, money from your own bank account and those of friends and family can only go so far. Ambitious start-ups will soon need to seek out alternative sources of funding. Bank loans may be an option for some early-stage startups, but getting seed funding is usually a better choice.

What are the advantages of seed funding?

Of course, seed funding gives your startup a major financial boost but having investors behind you means that your business gains more than just cash.  

For investors, there's significant risk when investing in an unproven startup. One of the major advantages of seed funding is that your investors will understand that risk and be willing to take it on. You'll also benefit from the expertise of your investors, which can help you grow and develop your startup in directions you might otherwise have overlooked. What's more, your investors typically have strong business networks that you'll be able to access and benefit from.

Another advantage is that seed funding is typically debt free and flexible, so you won't be burdened with loans or restrictive agreements.

Who invests in seed rounds and why?

Angel investors are one of the most common sources of seed funding for startups. 

The typical angel investor is a high net worth individual who is motivated to pursue riskier investments. You might also find angel investors teaming up to invest as a group (these are known as angel networks).

Seed funding can be risky for investors, as your company hasn’t had much of a chance to prove itself in the market. That being said, there is opportunity in it too. Angel investors who do choose to focus on seed funding rounds can purchase a portion of a startup’s equity when valuation is at its lowest and so these investments can be very lucrative. 

For example, in 2004, Peter Thiel invested $500,000 in Facebook, then sold his shares a few years later for $1 billion.

Venture capitalists (VCs) are another common type of investor who targets seed rounds. Here, the difference is that angels invest their own money, while VCs invest other people’s. Or, as Y Combinator points out , the main difference between angels and VCs is that angels are amateurs and VCs are pros. As a result, angels can make decisions more quickly, while VCs will typically need to go through several rounds of meetings before making the final decision.

When’s the right time to raise seed funding?

According to Y Combinator, to be successful in raising a seed round, “founders should raise money when they have figured out what the market opportunity is and who the customer is.”

Seed funding gives you a financial springboard to prove that your business concept can work. Finding companies with credibility and product-market fit is usually the main goal for investors at the seed stage. The seed round is the prime time to demonstrate that your product or service can achieve initial traction in your target market.

Getting clarity on those points is vital. You'll need to show that your product matches customer needs and that customers are already adopting it. 

You should also have evidence that your customer adoption rate is increasing over time. That indicates a positive trajectory or a sign to potential seed investors that your company will generate significant returns on investment.

Start-ups can decide to raise the seed funding at various different stages. Investor community StartEngine recommends that companies aim to raise their seed round "when they have less than $3 million annual recurring revenue (ARR).”

The average amount of funding raised in a seed round is $2.2 million, but it can be as low as $100,000 or as high as $5 million. 

The exact amount of funding to raise is up to you as the founder. But, in general, it's recommended that you aim to raise enough to either reach profitability and/or to bring you to your next funding milestone with ease. 

Judging this accurately requires a detailed understanding of your business operations and exactly what is needed to get you to that next milestone.

But just because you can raise a certain amount of money at the seed round, doesn't always mean that you should. 

Average seed round by industry – examples 

The average seed round has grown dramatically over the past ten years. In fact, today’s seed rounds are almost comparable to Series A rounds from a decade ago. According to Finmark , most seed rounds today are around $1-$4 million.

In Europe, as of December 2021, healthtech and software firms raised the most in seed funding , with fintech doing especially well. Fintech had a larger average seed funding round size of €5 million, compared with €2.5 million for health and €2 million for software.

Globally, and in SaaS specifically, the average seed funding round was $2.1 million, according to the SaaS Funding Report in May 2021 . However, at least 15 companies in this survey chose to withhold details of the amount raised, so the true average would have been even higher.

How much equity should you give a seed investor?

Remember the essential trade-off between the amount of funds that you raise and the amount of your company you hand over to the investors. 

According to Y Combinator , the sweet spot is to “give up less than 10% of your company, while still proceeding to Series A”. However, this isn't always possible, and many funding rounds will mean giving up 20 or even up to 25%.

How long does seed funding take to raise?

The answer to this question is really "it depends”. 

That’s because there are a whole host of factors that impact the timeline of a successful seed round. As a general rule, it's best to assume it's going to take longer than you expect. 

If you find a willing investor and there's a decent level of demand for your offering, then it could take 6 to 8 weeks to close the deal. 

That’s when your documentation is in order, you’ve got your lawyers ready and everyone involved in the process is communicating on time. 

If there are delays with any of those elements, then 12 weeks is a more realistic timeframe. Finding a suitable investor is typically the part that takes longest, depending on how many you have to approach and/or pitch.

Remember, you’ll have to manage the seed fundraising process while also managing day-to-day operations of your start-up. Don't underestimate how much time this can take.

No matter what stage you’re at in the fundraising process, it's essential to keep cultivating momentum and displaying confidence in front of your potential investors.

The overall process of raising seed funding is best viewed from a systematic perspective. The folks at Visible liken the process of fundraising to the systems within your sales and marketing funnels. 

Just as you move new leads through the different stages of your funnel, so can you move potential investors through the different stages of raising seed funding.

Start by gathering qualified potential investors, either from outreach, introductions, or inbound interest. Then filter them to make sure they fit your model of an ideal investor.

Next, make sure you stay fresh in their minds by keeping in regular communication. This is important even if you're not actively seeking funding at the moment. For example, you might email them a list of highlights from your investor update newsletter.

Developing and maintaining good relationships with potential investors is a major key to success in raising seed funding. What's more, once those investors decide to fund your startup, they’ll be good sources to approach when you're ready for subsequent rounds of funding.

How much revenue does a startup need to raise a seed round?

That depends on the investor. Most venture capital investors want startups to be monetized, which can be difficult in the early stages. Other kinds of investors may be convinced by your story, your idea, and your expertise.

At the seed stage, a startup may be anything from a pre-revenue state, to making as much as a few hundred thousand dollars annually.

Beyond revenue, the most important factor is proof that people like your product and want to use it. If you don't yet have revenue, you can still show that people value your product by means of social proof like feedback, social media mentions, and press coverage.

The goal is to show investors that there is an audience that’s willing to pay for your product, giving them confidence that your business is financially viable.

What are your financing options for seed fundraising?

Several financing options are available for seed rounds, but the details can be complex. In this section, we present a high-level overview of the various options, with links for where to read more.  

We recommend that you read up in in depth about the different types of financing and make sure you’re familiar with the key terms of these deals. 

Seed fundraising typically involves one of three financing options:

Let’s take a look at them. 

Option #1: Debt

Convertible debt

Here, your startup borrows money from the investor, intending to convert the debt to equity in the future. It happens via an instrument called a convertible note. The loan includes a principal amount (i.e. the investment itself), the interest rate, and a maturity date when both the principal and interest must be paid back. It will also specify how the debt will be converted into equity. 

Once your company does an equity financing round, the convertible note will be converted into equity. Financing via convertible debt can be useful for your company if you believe your equity will be worth more later down the line. For more on convertible debt, check out this detailed post from Fred Wilson.

Safes (simple agreements for future equity) are similar to convertible debt, but without the requirements for interest rate, maturity, and repayment. Typically with a safe, you'll be able to negotiate the terms of the amount, the cap, and the discount. 

For detailed information on safes, check out this detailed primer from Y Combinator.

Option #2: Equity

When financing with equity, you’ll set a valuation for your company, with a per-share price, then issue new shares and sell them to investors. As Y Combinator points out, financing with equity is “more complicated, expensive, and time-consuming” when compared to safes or convertible notes. They strongly recommend that you stick to the latter two financing options when seeking seed funding. Later on, when you plan to issue equity, it's essential to hire a lawyer.

Option #3: Grants 

In both the US and UK, governments often fund promising startups. This may sound enticing, but the disadvantages include cumbersome application processes, intense competition, and many conditions attached.

In the US, seed funding for startups is available via two federal government award programs: the Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR) program.

In the UK, government funding opportunities include the following:

• R&D tax credits
• Innovation grants ( Innovate UK , Horizon2020 )
• Regional growth funds
• Small Business Research Initiative (SBRI) grants  
• Startup Loans (government-backed initiative for startups)

How do you find a seed investor?

At the early stages of your start-up’s life, you probably don't have many sales figures to prove the success of your idea. 

That’s why the people most likely to invest will be those with confidence in you, who are fascinated by what you're working on, and willing to commit the funds. 

Here are the types of investors most likely to provide seed funding.

Angel investors 

The most common type of seed funders, angel investors are wealthy individuals who invest their own money in projects they believe in. The big advantage for you is that they can typically move quickly with their decision-making. 

Incubator programs

These programs not only train you in how to run a business, but also give you access to a community full of expertise, plus exposure to high-level venture capitalists for additional funding rounds. They can be a great choice for finding seed investors while gaining essential knowledge about business. 

Accelerator programs (such as Y Combinator or Techstars) are another possibility, but they're usually aimed at helping companies scale up, rather than supporting early-stage innovation.

Venture capital groups specializing in pre-seed and seed funding

Venture capital (VC) funds have the ability to make large seed investments, but the decision-making process can be long and drawn out. To find one that may suit you, look at what different VCs have funded in the past, and build a list of those who have previously worked with start-ups similar to yours. It's important to create a tailored campaign for each specific investor, rather than taking a scattershot approach.

Crowdfunding platforms

Crowdfunding platforms (such as Seedrs or Crowdcube) are growing in popularity, especially among new SaaS startups. In fact, ​​96% of SaaS companies securing equity via crowdfunding were in seed or venture stage at the time of raising, according to Beauhurst . 

The crowdfunding concept is simple: you showcase your business to the public and anyone in the world can support it. To succeed with crowdfunding, you'll need a compelling idea and the ability to weave a resonant story around it.

Corporate seed funds

Large companies like Apple or Google regularly provide seed funding for start-ups. They’re motivated by the potential for new sources of income, intellectual property, or talent later down the line.

Family offices 

Family offices manage wealth and investment strategies on behalf of ultra-high net worth families, with the goal of maintaining and growing generational wealth. For entrepreneurs, family offices are becoming an interesting alternative to venture capital funding. In the past, family offices have typically focused on hedge funds, real estate, and bonds, but many are becoming more open to investing in start-ups . 

Getting the right documentation for your seed funding round is critical, so it pays to know exactly what should be on the list. 

Andrew Pankevicius of FundSquire recommends tailoring your document pack to fit the preferences of the type of investor you're presenting to. 

If it's a venture capital firm, aim for a short and concise pack, while also making sure you have an online data room at the ready. If it's an incubator, you'll typically have to fill out a standard application process, then do a face-to-face pitch if the application is successful. 

Family offices usually prefer hard copies of financial models that follow accounting standards, such as income statements and forecast balance sheets. 

Below is a list of typical documents that could be found in a seed funding data room. 

Having these documents already prepared is an important way to keep conversations with potential investors flowing smoothly. 

For seed funding rounds, investor questions typically revolve around market sizing, go-to-market strategies , or high-level capital deployment strategies.

• Cap table and vesting schedule 
• Terms of the raise
• High-level capital deployment strategy
• Market sizing and breakdown
• Product development roadmap
• Go-to-market strategies
• Target customer personas
• Financial forecast model

Source: FundSquire

Just like defining your customer persona for your business, choosing a seed investor starts by defining what your ideal investor looks like.

Tips from startup experts on choosing and working with seed investors.

• Understand the investor’s investment thesis to figure out whether your value proposition falls within it. Do your research carefully to avoid wasting anyone’s time. There’s no point approaching investors who only target a certain sector if your company isn’t in that particular sector.
• If you’re targeting seed funding in the UK, be aware that many UK funds will only invest in UK-based companies because that allows them to access certain tax benefits. This is common, but not always obvious from their websites.  
• Understand what type of investor you want to work with. Do you want someone who’s very hands-on, or who lets you do things your way? Be aware of investors implementing conditions that might be unacceptable to you. 

–  Nadia Sergejuk, Early Stage Investor, London 

• Always pay for experienced lawyers and accountants. One difference between UK and US startup culture is that the UK is more ‘hack it / do it yourself’, while Americans usually hire the best lawyers. Working with good professionals will pay big dividends and will ensure you get the best outcome from whatever contract you sign. 
• Treat all investors equally, otherwise you're going to create chaos. Be clear, honest and transparent from the beginning. Define your boundaries, roles and responsibilities, and make sure that you trust everyone you work with. 
• Try to learn from others, get referrals and interview potential investors just as they’re interviewing you and finding out who you know and how you work.
• Most importantly, remember – a deal is never done until the money’s in the bank. 

– Anna Downey, CEO & Founder, Buzzbar , London

Dos and don’ts for communicating with investors

Knowing how to talk to your potential investors is another vital factor in successfully securing seed funding. Here are some handy tips to help you get it right the first time.

• Develop a great, one-line elevator pitch . Encapsulating your company and mission in one sentence leaves a great impression – that’s why it’s an essential part of your fundraising toolkit. Don’t forget to practice your pitch! 
• Tell a compelling story. You need to convince investors to fund your company before you have any revenue. Having a great story really helps.
• Focus on market need. Make sure you’re clear on WHY the market needs your product or service, providing robust evidence if possible. 
• Know your competition. Be ready to explain to potential investors exactly how your product or service is better than the competition. Failing to do so can make them nervous.  
• Explain why the investment matters to you. You’ll need to clearly articulate why your company needs funding right now. Whether it’s to hire more employees, buy new equipment, or acquire a competitor – be as specific as possible. 

What NOT to do

• Don’t send generic cold emails. It's always more effective to get a warm introduction; but if you can't do that, at least make sure your first email to a potential investor is personalized. 
• Don't try to play investors off one another. This is usually a bad idea, especially when you’re inexperienced at fundraising  
• Don't come across as indecisive. Although it’s fine to admit that you don’t know something. 
• Don’t be slow when following up or closing a deal. Investors tend to move fast and you doing the same is a sign of confidence.  

Getting seed funding doesn’t necessarily mean having big revenue numbers. In those crucial early stages, knowing your product-market fit, understanding your customer, and wrapping it all up in a compelling story can be enough to convince the right investor that your startup can succeed. 

Ready to get started? Check out this article from SaaS expert Todd Gardner on determining your total addressable market (TAM) .

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Related reading

Understanding the Seed Stage: Nurturing Your Startup to Success

Starting a business is akin to planting a seed. The initial stage, known as the "Seed Stage," is where your entrepreneurial journey truly begins. In this article, we will delve deep into the seed stage, exploring its nuances, challenges, and opportunities. Whether you're an aspiring entrepreneur or an established business owner looking to expand, understanding the seed stage is essential.

Seed Stage: Planting the Entrepreneurial Seed

The seed stage marks the inception of your startup. At this point, you have a brilliant idea, a vision for your business, but you need financial support to bring it to life. This is where seed funding comes into play.

What is Seed Funding?

Seed funding is the initial capital injection a startup receives to prove its concept, develop a prototype, and take the first steps toward building a viable business.

During this phase, you'll encounter several critical aspects:

Creating a Compelling Business Plan

The role of a business plan.

Your business plan is your roadmap, guiding you through the seed stage and beyond. It outlines your goals, strategies, target audience, and financial projections. Investors will closely examine your business plan, so it must be compelling and well-structured.

Seeking Seed Investors: Pitching Your Vision

Identifying potential investors.

Research and identify potential seed investors who have a history of supporting startups in your industry. Building a network and attending startup events can also be instrumental in connecting with investors.

Crafting an Effective Pitch

Your pitch is your opportunity to convince investors that your idea is worth their investment. It should be concise, persuasive, and highlight the unique value proposition of your business.

Building a Strong Team

The importance of a skilled team.

Your team is the backbone of your startup. Assemble a group of individuals who complement your skills and share your vision. Investors often assess the strength of your team when making funding decisions.

Prototyping and Product Development

The significance of prototyping.

Developing a prototype or minimum viable product (MVP) is crucial in the seed stage. It demonstrates your idea's feasibility and provides something tangible for potential investors to evaluate.

Seed Stage Financing Options

Beyond traditional funding.

While traditional seed funding from angel investors or venture capitalists is common, consider alternative financing options such as crowdfunding or incubator programs, depending on your startup's nature.

Navigating Challenges: Surviving the Seed Stage

The seed stage is not without its challenges. Here's how to navigate common hurdles:

Managing Cash Flow

Cash flow management is critical. Ensure you allocate funds wisely and prioritize essential expenses.

Market Validation

Prove that there's a demand for your product or service through market research and early customer feedback.

Adaptability

Be prepared to pivot if your initial approach isn't gaining traction. Adaptability is a hallmark of successful startups.

Scaling Up: Transitioning Beyond the Seed Stage

As you progress through the seed stage, the ultimate goal is to secure enough funding and traction to move into the growth stage. Here's how:

Securing Series A Funding

Series A funding is the next step after the seed stage. It provides the capital needed to scale your operations and reach a wider audience.

Marketing and Brand Building

Invest in marketing strategies to increase brand awareness and customer acquisition. Building a strong online presence is essential.

Product Refinement

Continuously refine your product or service based on customer feedback and market trends to stay competitive.

FAQs: Answers to Your Burning Questions

How long does the seed stage typically last.

The duration of the seed stage can vary widely, but it often spans 6 months to 2 years, depending on the complexity of your business and fundraising efforts.

What percentage of equity should I offer to seed investors?

The equity percentage you offer to seed investors depends on factors like the amount of funding needed and the valuation of your startup. It's a negotiation between you and the investor.

Is it necessary to have a co-founder during the seed stage?

While having a co-founder can be beneficial, it's not a strict requirement. What's essential is having a strong team with complementary skills.

Can I seek seed funding for a non-tech startup?

Absolutely! Seed funding is available for startups in various industries, not just tech. Investors are interested in innovative ideas across the board.

What are the key metrics investors look for in the seed stage?

Investors typically focus on metrics like customer acquisition cost (CAC), customer lifetime value (CLV), and the size of the addressable market.

How do I know when it's time to transition to the growth stage?

The decision to move to the growth stage is influenced by factors like revenue growth, market share, and achieving key milestones outlined in your business plan.

In Conclusion

The seed stage is an exhilarating yet challenging phase of your entrepreneurial journey. It's where you lay the foundation for your business and prove its viability to investors and the market. By crafting a compelling business plan, building a strong team, and securing seed funding, you can navigate this stage successfully. Remember that adaptability and resilience are your allies as you work towards transitioning to the growth stage. Embrace the challenges, learn from them, and watch your startup flourish.

Explore, innovate, and nurture your entrepreneurial seed to grow a thriving business.

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Seed Stage Funding 101: What it Is & How it Works

When it comes to starting a business that you have always dreamed of, you need to be able to handle any hurdles that may come your way. Having the right people that will become your helping hand in building future success is essential.

You need to have enough resources by having a seed-stage investor who will financially support your company in the long run. These investments are a tremendous help to your startup because they will serve as a stepping stone to reach your target eventually.

I will tell you brief details about seed stage funding, and deal sourcing on this page, so read the conclusion until the end.

What exactly is the seed funding?

The following is a condensed explanation of seed funding: Seed money is a form of early-stage financing that new businesses receive from investors in exchange for a share of ownership in the company. 

The initial official fundraising round is called seed funding, and it comes immediately after the pre-seed investment stage. The fundamental objective and aim of seed investment is to assist a company in launching its operations successfully. 

It is necessary to cover the early stages of product development, thorough market research, and other processes during the initial step.

Seed capital is a component of the initial investments made in young businesses. After that, the money is used to maintain the company’s expansion. 

Some return value must be offered to the investors for startup seed funding to be considered acceptable. This could be a proportion of the company’s equity or investment; in other instances, it could be a portion of its later-stage profits.

Seed money can range from a relatively modest sum to a sizeable one, depending not only on the nature of the startup, the sector in which it will operate, and any other pertinent business aspects. Seed venture capital firms can make more significant follow-on investments to keep or increase their equity stake in the company.

How does the funding for the seed stage work?

The concept of “seed funding” originates from the metaphor of growing a tree, in which the seed represents the initial component required to move forward with developing a business. When considered, “seed funding” describes the initial sums of funds a startup raises. 

The term “seed financing” refers to the stage of funding that comes from first equity.

The purpose of the various investment rounds that startups go through is to gradually expand the firm from a proposed model into a fully operating business. This is done with the end goal of eventually having a successful strategic exit or going public. 

Most high-growth and scalable firms go through a phase in which they need to burn cash to enhance their growth before being profitable. With startup funding, these companies can get through this phase. Hence they will miss the finish line.

A war chest is virtually always a competitive edge in all aspects that count, including employing key staff, public relations, marketing, and sales. Thus the initial investment round is frequently raised since the capital permits firms to live and thrive. 

This indicates that financial resources are invested in the startup in exchange for ownership stakes in the company. When expanding their businesses, most tech startups and the subindustries that comprise the tech industry typically follow this model.

As a result of the fact that the typical business being evaluated by seed-stage investors needs a substantial amount of sales data or experience to draw on, seed-stage investors will consider the expected growth trajectory and existing track record, management, market share, and dangers.

What is the Evaluation of the Funding?

Analysts perform a valuation of the company in question before the beginning of any round of funding. The management of a company, its established track record, the size of the market, and the level of risk all play a role in determining a company’s valuation.

The company’s valuation, in addition to its current maturity and future growth possibilities, is an essential factor to consider when comparing the various fundraising rounds. In turn, these characteristics impact the types of investors likely to become involved and why the company may seek new cash.

How to evaluate New Businesses at Their Infancy, Their Early Stages, and Their Growth Stages

Evaluating a new business venture involves elements of both art and science. At the pre-seed stage, when the creator has a concept, the founder’s background, educational qualifications, domain experience, previous ventures, market size, and the complimentary talents brought by the cofounders are some of the most critical variables to consider before investing in a startup. 

The criteria change after a company reaches the growth stage when it is deemed to have attained product market fit. This suggests the firm should have a list of paying customers, consistent sales cycles, a clear value proposition, and a developing revenue pipeline in the ideal situation. One needs to evaluate their go-to-market strategy, distribution channels, scalability, execution team, and so on at this time. 

When a company has reached the “unicorn” stage, it is too late for an individual investor to participate in it because the valuation is so high and the upside potential is so tiny. In addition to this, the required initial capital contribution to participate in these businesses is typically quite significant. 

Individual investors are not recommended to join at this stage because a substantial amount of their capital will be blocked in a company with limited potential in valuation and linear growth.

What are the key distinctions between Pre-Seed, Seed, and Series A funding?

Early-stage investing funds, also known as pre-seed, seed, and Series A funding, often relate to the first three stages of a company’s development.

To assist in the development and expansion of the company, each investment round has its specific objective and a distinct set of goals to accomplish. 

The following is a rundown of some of the more frequent terms related to early-stage investment rounds, as well as the distinctions between them:

1. Funding for the Early Stages

Early Stage Funding is a term used to describe the earliest rounds of the funding process that a new company or startup has to go through to reach the stage where they are a fully formed and operating organisation. This term is also used to represent the initial investment that a company receives when it is just starting. 

Startups in their early stages typically have a prototype that has been tested and are working on establishing their ultimate business strategy .

Investors are more careful in their evaluations before making investments since there are higher risks connected with new companies and startups. This is because new companies and startups typically need a stable market position. 

Nevertheless, later-stage investors have started demonstrating a more substantial interest in seed-stage and early-stage investing because they want to ensure they have a place at the table from the beginning of the process. 

Because of this, getting seed venture money, for example, becomes more feasible for many startup companies, particularly those in the technology industry.

2. Pre-Seed

New businesses, often known as startups, have just entered the very first stage of the investment process. During the pre-seed fundraising stage, investors need a viable business plan to base their investments on. 

The pre-seed funds are typically collected so the business can begin preparing a workable business model that demonstrates the company’s future sustainability.

Investors are more likely to be willing to write checks when presented with a compelling idea, convinced that the founding team can realise its vision, and confident that the opportunity being represented is real and suitably substantial. 

Investors buying a stake percentage in the firm want to be assured about the quality of their investment to make an informed decision.

A small company receives assistance in the form of a seed round to facilitate the launch of its business operations. When a company’s business model is more developed than just an idea of a product or service, it is typically ready to seek seed-stage venture financing, also known as early-stage venture capital. 

The new venture can provide evidence that it has the potential to mature into a sustainable firm that will produce a return on investment (ROI) in addition to extra revenues for both the venture itself and its investors.

4. Series A

At this point, the startup has to have finished developing its business model, and there ought to be some significant revenue to indicate that the product is suitable for the market. In most cases, this is the first important round of venture capital funding that the company has received. 

This round aims to offer emerging businesses more funding to cover their operating expenses, such as paying their employees, launching new goods, and developing marketing strategies.

Following the Series A round of funding, subsequent rounds are known as Series B, Series C, Series D, and so on. Nevertheless, after completing the Series A round, the funding process continues into additional stages. This concludes the process of investing in early-stage companies.

How Does an Investor Put Money Into New Businesses?

An investor can make two types of investments in a startup: direct and indirect. Individuals engage in direct investment when they find and finance investment opportunities themselves. They look for businesses with a novel business plan, proven leadership, and in-depth industry experience to back them. 

Due diligence is often skipped or done on the fly while making direct investments because of the short time available to the investor. This is partly because information beyond the founding team and a pitch deck are scarce.

However, there are primarily three channels via which indirect investment can be made in a startup:

Angel Network

An angel network is a group of wealthy individuals who have banded together to invest in new businesses. The entire investment comes from many modest investments made by many different people. 

Cross-industry investment is welcome in these networks, but individual firm investments are capped due to the significant risk involved. They like to spread their bets among several different companies.

Those in charge of a syndicate are called “syndicate leads.” They know a lot about the industry and have many connections within the startup world. They identify promising startups through their networks, conduct thorough due diligence, and are often the first investors to put money into a venture. 

Then, they spread the word to other individuals interested in the opportunity because they share the same investing thesis, focus on the same industries, and have had similar levels of success in the past. Individuals invest modest sums in numerous businesses, even when working together in syndicates such as angel networks. 

The earliest investors in a business are usually syndication. Founders often prefer to approach syndicates ahead of an angel network due to the speed with which they might receive funding.

Angel Investment Fund

Angel funds, a type of AIF, are the third option for investing in new businesses. The average investment horizon for angel funds is between eight and ten years. This setup is incredibly investor-friendly because investors may pick and choose whatever companies they want to invest in from the deal flow. 

Final Thoughts

When entrepreneurs are confident in their company’s story, have identified potential market opportunities, and understand their target audience, they should consider raising capital. Also, when owners want to raise funds, they need to convince investors, as it takes both data and the ability to persuade investors for them to invest. 

Once the founders of a company have accumulated sufficient data and evidence to demonstrate that their company has the potential to expand, they may begin crafting a story to present to potential investors. They can initiate the process of raising capital.

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How Founders Can Win Seed-Stage Funding in 2022

Pay close attention to the traction section of your pitch deck. It may be the difference between a financing boom or bust.

Fundraising demand is at an all-time high — and increasingly, VCs are aiming to get an early stake in promising startups. 

VC firms like  Greylock Partners ,  Andreessen Horowitz and  NFX Capital Management all recently announced new seed funds in excess of $400 million, each with the mindset that this high-risk stage of investment is connected to an even higher reward. While this increased demand should work to the founders' benefit, new data shows that expectations for the seed round are still high. In short, fundraising will not be a cakewalk.

Traction is one of the key areas of a business that VCs are very focused on in the seed round. DocSend analyzed pitch deck content and seed fundraising trends over the past year and a half, and our unique data uncovered that the traction section of seed pitch decks is one factor separating successful and unsuccessful raises.

What Is Traction at the Seed Stage?

Understand your target audience .

So what exactly do you need to communicate in the traction part of your deck? Traction can be a nebulous term, as it often means something very different at each stage of a company's development and can vary by industry. Let’s break down how seed founders can address this critical section of their pitch decks regardless of the development of your product or service. 

Your traction slides should communicate that you have established a clear product-market fit: how well your product or service resonates in the marketplace. The traction section of your deck can take up between one to four pages depending on the stage of your product, and can include things such as letters of intent, testimonials, customer pipeline and beta feedback. It’s also important to note that seed companies will ideally indicate more than one type of notable market traction to achieve a successful raise.

How do you prove traction? Consider the traction section of your deck as the proof points of your customer development plan. Customer development is rooted in researching and understanding your market and identifying the right target audience. One of the first things to nail is what is your market size and therefore, who is your ideal customer. Hubspot is a great tool to build customer personas , and I recommend using it if you haven’t already defined your target audience or need help refining it further.

This step is critical because understanding your audience is how you understand what part of the marketplace your idea is likely to generate value — which in turn makes your company a good investment. Many times, I've seen founders try to cast a much wider net regarding who their customer is in order to show a larger market or demand, but this will come back to haunt you. 

Make sure you are specific and honest with yourself about who will actually directly benefit from your idea, and refine the persona and audience so that this customer type can't live without your idea. There isn’t a magic formula for a solid traction section across every industry, and it may mean one thing for SaaS and another for fintech.

More Seed-Stage Funding Strategies 5 Tips for Your Startup's Seed Round

Define the Problem

Once you have an idea of who you are uniquely positioned to reach, you can use that lens to identify the specific problem your product or service solves. Your next goal should be to start understanding what makes your idea bulletproof.

The old adage in tech is to move fast and break things. Quickly  testing your ideas with potential customers to collect key insights is the pathway to creating a product that investors want to back. This concept is a departure from the old days, when founders would spend years with an idea perfecting it just to find that no one wanted or understood it. In today’s fast-paced marketplace that just won’t work.

You don't always need to test by building the product; there are plenty of explorations, interviews and online communities where you can test your idea and validate it before expending unwarranted resources. Sometimes it makes sense to build something first — but not always.

Pull data from this rapid trial-and-error process, and be honest with yourself about what that data signifies. If you can weave this data into your narrative to show investors that, for example, 88 percent of respondents would be willing to switch to your product or service over a competitor’s, then you have a lot more ground to stand on than a founder who is receiving “overwhelmingly positive feedback.”

The goal isn’t to simply wow everyone who demos your product; it’s to glean insight into how it can be better and more useful for your target audience. Highlighting feedback you've received and incorporated into your strategy can also be an important step in demonstrating to investors that others have taken the time to provide you with feedback, and it also indicates that you’ve taken the time to do your research and talk to the right people.

Traction can also be articulated through important milestones. Profit and loss metrics, awards, customer testimonials or product reviews can each demonstrate to investors that your ideas are connecting to the marketplace beyond the initial testing and idea phase. These milestones are typically available at the product stage, and represent proof points that investors need to see to understand how your product is performing with users in your market. 

Identify Fundraising Trends

At DocSend, our  aggregated view of pitch decks from the seed stage reveals trends that outline the importance of nailing traction regardless of industry. For example, investors spent 78 percent more time on average reviewing the traction slides for companies they choose not to invest in. They are giving extra scrutiny to companies that either didn’t show enough traction or didn’t make a compelling enough case. Your job is to do this work for them through rigorous testing of your ideas beforehand.

The takeaway here is that your product-market fit should be clear and easy to understand. Investors are most likely spending more time on this section for unsuccessful decks to make sense of them, and these days time is not a commodity VCs have to spare.

First impressions matter when it comes to introducing your ideas to investors. VCs spent 3:20 reviewing a successful pitch deck, and 2:42 on unsuccessful decks. At the seed stage, investors spend nearly 40 seconds of this time reviewing the traction section of founders’ pitch decks. If investors like what they see on the initial review of your deck, that impression tends to stay with them upon subsequent visits leading to a favorable and longer viewing time. Make sure your deck reflects an understanding of the  important role your traction slides   play so you can make the best initial impression on investors and hook them right away.

Leverage Additional Tools

If you have a considerable amount of information you are compiling over time to demonstrate traction, you should consider a  virtual data room . 

For example,  Lactiga , a biotech startup that is repurposing the global supply of unused human milk for novel therapeutics, has a much longer product development cycle than software companies. To reflect this longer cycle and prove short-term and long-term traction, Lactiga has built a data room with a rich set of information on its progress, including patents, research findings and media coverage. 

Traction doesn’t always have to be a traditional metric. Think about what makes your company unique and get creative in identifying the different ways you can show that you are making progress — and that there’s a need in the market that no other company can fill but yours. Find different ways to show validation and think outside the box. For example, if an industry analyst isn’t covering your product category, convince them to do so or commission your own research. 

There are plenty of resources at your disposal. If you are raising a Pre-Seed, Seed or Series A round, check out the  DocSend Fundraising Network for an opportunity to connect with actively investing VCs and get feedback on your pitch deck. And for even more of our fundraising research check out the  DocSend Startup Index .

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Seed Capital: What It Is, How It Works, Example

What Is Seed Capital?

The term seed capital refers to the type of financing used in the formation of a startup . Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product. Much of the seed capital a company raises may come from sources close to its founders including family, friends, and other acquaintances. Obtaining seed capital is the first of four funding stages required for a startup to become an established business.

Key Takeaways

• Seed capital is the money raised to begin developing an idea for a business or a new product.
• This funding generally covers only the costs of creating a proposal.
• After securing seed financing, startups may approach venture capitalists to obtain additional financing.
• Some seed capital may come from angel investors—professional investors who have a high net worth.

Investopedia / Joules Garcia

Understanding Seed Capital

A company that is first starting out may have limited access to funding and other sources. Banks and other investors may be reluctant to invest because it has no history or established track record, or any measure of success. Many startup executives often turn to people they know for initial investments—family and friends. This financing is referred to as seed capital.

Seed capital —also called seed money or seed financing—is referred to as such because it is money raised by a business in its infancy or early stages. It doesn't have to be a large amount of money. Because it comes from personal sources , it's often a relatively modest sum. This money generally covers only the essentials a startup needs such as a business plan and initial operating expenses —rent, equipment, payroll, insurance, and/or research and development costs (R&D).

The primary goal at this point is to attract more financing. This means catching the interest of venture capitalists and/or banks. Neither is inclined to invest large sums of money in a new idea that exists only on paper unless it comes from a successful serial entrepreneur.

Special Considerations

A startup normally has to move through four distinct phases of investment before it is truly established—seed capital, venture capital,  mezzanine funding , and an initial public offering (IPO) . As mentioned above, seed capital tends to be just enough to help a startup achieve its initial goals. If the company is successful in the initial phase, it may catch the interest of venture capitalists. These investors are likely to invest heavily in the company before it moves further. So-called mezzanine financing is sometimes necessary to support a company into its introductory phase. This is usually available only to businesses with a track record—even then at a high rate of interest . The final stage is when early investors get their payday. When a young company goes public with its IPO, it raises sufficient capital to keep growing and expanding.

Seed capital is one of the four phases of investment along with venture capital, mezzanine funding, and an initial public offering.

Seed Capital vs. Angel Investing

Professional angel investors sometimes provide seed money either through a loan or in return for equity in the future company. These investors are generally high-net-worth individuals (HNWIs) and may come from the personal network of a startup's founder(s). Angel investors often enjoy a hands-on role in helping develop a company from scratch. If the angel investor contributes less than $1 million, the money is usually in the form of a loan. For the entrepreneur , this can solve the problem of attracting sufficient seed money, given the reluctance of financial institutions and even venture capitalists to take on considerable risk. When contributing more than $1 million, an angel investor typically prefers seed equity and becomes a co-owner of the startup and the holder of preferred stock with voting rights.

Seed Capital vs. Venture Capital

Seed capital and venture capital are often used as synonyms, and they tend to overlap. Seed capital is generally used to develop a business idea to the point that it can be presented effectively to venture capital firms that have large amounts of money to invest. If venture capital firms like the idea, they generally get a stake in the new venture in return for investing in its development.

Venture capitalists provide the lion's share of the money needed to start a new business. It is a considerable investment, paying for product development, market research , and prototype production. Most startups at this stage have offices, staff, and consultants, even though they may have no actual product.

Example of Seed Capital

Alphabet, the parent company of Google, provided seed money to the Center for Resource Solutions in 2016 for a project to implement renewable energy certification programs in Asia. The goal of the San Francisco-based center is to help businesses buy power from clean sources. The Center for Resource Solutions is a nonprofit organization , but Google has a business interest in the venture. It is already the world's largest non-utility purchaser of renewable energy but it wants to power its global data centers, and eventually its entire operations, with renewable energy.

Google. " Laying the Foundation for Renewable Energy Certification Programs in Asia ."

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Our Guide to Building a Seed Round Pitch Deck: Tips & Templates

Raising venture capital is challenging. On top of building a product, hiring a great team, and scaling revenue — seed-stage founders are responsible for raising capital.

Throughout a seed stage fundraise, different investors will want to see different assets and data points. One thing that founders can expect most if not all, investors to see is a seed round pitch deck.

Learn more about how to build a pitch deck for your seed stage funding below:

What is a Seed Round Pitch Deck?

A seed round pitch deck is a presentation designed to share your vision, business plan, metrics, and other insights to help raise capital from investors.

Ultimately, the goal of a pitch deck is to move investors down your fundraising funnel and to improve your odds of raising capital. Learn more about crafting your seed round pitch deck below:

What Investors Want To See in Seed Round Pitch Decks

Companies that are raising funds for the first time are going to be in need of a seed round pitch deck to entice and share their story with investors. Usually, companies raise anywhere up to 2 million (the average is 2.2 million but can be up to 5 million ) for their seed round from either angel investors, friends & family, or venture capitalists.

In a (pre) seed round it’s common to raise from angel investors, startup accelerators, or friends and family . With the explosion of pre-seed stage and seed-stage investors, venture capital is becoming a more approachable first round of capital. You can find a global list of the top active seed-stage investors here .

No matter who you’re pitching though, there are certain expectations for an early-stage/seed-stage startup to present in their pitch deck. Founders should tailor and adjust their pitch based on who they’re reaching out to, but great seed round pitches come down to a few core things: a succinct but exciting story, an exceptional team, product potential or traction, and a growth plan.

A Succinct but Exciting Story

You’ll need a clean, clear narrative and to show you have a vision and/or plan for the future of your company since things are still in development. Try to not only excite but inspire as well. Make your audience want to invest in you, your vision, and your company’s purpose.

An Exceptional Team

Most VCs will tell you that having a rock star team is one of the most important things to them. What you’ll want to do in this slide is establish credibility, demonstrate expertise, build trust in the idea and company.

Product Potential or Traction

If you have proven some product-market fit, gathered user/customer metrics, or generated revenue make sure to share this as a proof of concept. Going into your first round of capital, investors will also understand that you may have limited or no data to start.

A Growth Plan

Even if you may not have a product built or know the exact business model yet you still need to show an understanding of the market/customers, business, and scalability.

Startups should make their stories and decks as data-driven as possible to drive home the point and bring credibility to what is being shared. Check out our guide, “ Building A Startup Financial Model That Works, ” to help model your company’s future.

Check out Visible Connect, our free investor database, to filter and find the right investors for your business at any fundraising stage.

Our Step-by-Step Seed Round Pitch Deck Template

Seed-stage startups should approach their first pitch deck differently than they would in other later rounds because they usually won’t have very many stats or users to go off of. This is why storytelling is key as well as finding elements to focus on like the team and competitive advantages so that the investor can understand the future value of the company, since there might not be much else to base it off on at this stage in your company. Download our free pitch deck template here or below:

Cover/Title

This slide introduces your company so you can keep it simple and just include any important information such as your logo, company name, contact information, and a one-liner.

The team is one of the most important factors to VCsseed investors when considering investing in a seed round since it is one of the keys to a company's success. Highlight how each person brings a unique and beneficial aspect to the team, and role, and if it applies the companies mission, the problem you’re trying to solve and/or competitive advantage. This lays a good foundation for the rest of the presentation so investors know who they’re speaking with and gives more credibility to what is being said.

The Problem

Make investors understand how the problem impacts the world/ people and why there is a need for something about it to be fixed.

The Solution

State that the right solution for this problem hasn’t been solved yet or can be improved upon. Then how were you able to innovatively come up with a way to fix the problem, why will it benefit customers, and why you are the best company to do so. This is in essence your elevator pitch and should be kept short, compelling, and to the point (30 seconds is a good rule of thumb).

This slide can also focus on the product if you haven’t already collected any metrics which validate relevant company or user information. If you already have data and are tracking KPI’s this is where you want to add it!

With Visible, you can track and automate your startup’s key metrics and build beautiful charts and dashboards for your seed-round pitches.

Market Size and Opportunity

Here you will include all relevant information on the opportunity you’re looking to take advantage of and what the size of that market may be. Something important to note is the importance of tackling a niche market first and investors won’t mind if the market size is small if you are planning on dominating the space.

“Sequencing markets correctly is underrated, and it takes discipline to expand gradually. The most successful companies make the core progression—to first dominate a specific niche and then scale to adjacent markets—a part of their founding narrative.” – Peter Thiel, Zero to One

Read more on How to Model Total Addressable Market (template Included as well) where we share:

• What is Total Addressable Market (TAM)?
• How to Calculate TAM
• The Free Visible Total Addressable Market Template and Evaluation Model
• Where Does Your Total Addressable Market Start (and End)?
• Why Knowing Your Total Addressable Model is Important
• Building Your Total Addressable Market Model

Competition Analysis

Just because you have competitors doesn’t mean it’s not a business you should start but rather you need to have a clear understanding and plan on what your advantage is. If there are existing companies in the space it can validate there is a need but investors and customers will need to understand why you are the better choice.

Financials/Metrics

Here you want to be able to prove profitability as well as share what the hypothetical financial future (3-4 years) of your company will look like. At the seed stage, this will be more high-level information as you again don’t have much to go off of as of now but do include revenue and user/ customer projections.

Why Now/Why Me?

This is another place for you to pitch yourself and your team’s expertise, and the company's secret sauce. What makes this combo unique, what’s your competitive advantage, and strategy.

Timing is also one of the essential factors that can make or break a company. Justify why you’ve decided to enter the market at this very moment and either explain how this will help you, or how you expect to defeat the hurdles of being early. If you are early then end by making it clear that you will be the first which will allow you to win the market. If you’re late in the game then you’ll want to explain what your competitive advantage will be and how you can utilize learnings and data that is available because of this. Every disadvantage can also be advantageous in its own way as well.

The ask can often be an underutilized section in investor updates and founders might also not realize it’s also something great to include in a pitch deck as well. An investor shouldn’t only be seen as a capital resource but also as a knowledge and connection resource. For investors (especially in this stage) it is also good for them to know where you need help and allows them (and you) to see if they are in a position to do so. If they do decide to invest it is in their best interest to do what they can to help and contribute to the success of the business.

Want some inspiration? Check out our article 18 Pitch Deck Examples for Any Startup or download our free pitch deck template below:

Related Resource: Pitch Deck Design Cost Breakdown + Options

The Best Seed Funding Pitch Deck Examples

There are thousands of other founders and startups that have successfully raised a seed round in the past and shared the deck they used. Check out a few of our favorite pitch deck examples below :

Airbnb Pitch Deck

Well before their publicly traded stock and catchy design, Airbnb, or AirBed&Breakfast, was pitching investors to raise $600k to get things off the ground. The Airbnb seed round deck is focused on storytelling and hooking potential investors

Uber's Original Pitch Deck

Like Airbnb, Uber has humble beginnings and a different name, UberCab. Their original pitch deck showcases the importance of keeping your pitch deck to the point. It is focused on facts and data, not fluff.

Buffer's Seed Round Pitch Deck

Buffer is a social media toolkit for small businesses. They raised a $500k seed round and shared the deck (and their breakdown) on their blog . The Buffer seed round deck does a great job of focusing on traction. The Buffer team reached out to 200+ investors, sat 50 meetings, and ultimately had 18 investors.

How to Pitch Seed Stage Investors

Once your deck is finished the pitching process begins. Firstly you’ll want to find investors to reach out to which you can do on our Connect Investor Database . For tips on emailing your first investors check out 5 Strategies for Cold Emailing Potential Investors. Save your time and theirs by only reaching out to investors who match crucial factors such as the industry they’re looking to invest in, funding amount, stage, and geography. These are factors that can also be filtered on our connect database and once you’ve found a good match you can have their profile added to our fundraising CRM .

Once you start reaching out and giving your first pitches you’ll start receiving feedback which should be seen as a gift and immediately implemented back into your deck. See it as a work in progress and change where needed. For instance, take notice of which slides are grabbing investors’ attention and maybe move those to the beginning or take aspects from it to add to other slides.

In terms of giving a good compelling pitch in person- being a confident and a good storyteller goes a long way. Investors should also feel your passion, energy, and ability to drive the company forward. To enhance these qualities people have found that taking a stand-up comedy or public speaking class has been helpful. Also researching what makes good storytelling can be advantageous.

How Visible Helps Startups Raise Capital

There is no one-size-fits-all pitch deck solution these points are meant to help guide the process but you should also see what makes sense for your company. Fundraising can be boiled down to storytelling.

We believe a VC fundraise mirrors a B2B sales motion. The fundraising process starts by finding qualified investors (top of the funnel) and building relationships (middle of the funnel) with the goal of them writing a check (bottom of the funnel).

Just as a sales team has dedicated tools for their day-to-day, founders need dedicated tools for managing the most expensive asset they have, equity. Our community can now find investors , track a fundraise , and share a pitch deck , directly from Visible.

Easily upload your deck, set your permissions, and share your deck with potential investors via a unique link ( c heck out an example deck here ). In return, we’ll surface the analytics that matter most so you can better your odds of closing a new investor. Try Visible here.

Seed Funding: A Guide for Starting Up with Seed Fundraising

As an angel investor who primarily works with tech startups in the seed stage, I see a lot of founders struggling with the same challenges. Often they don’t know what I’m looking for in our pitch meeting, they’re unsure of the other funding sources available to them, or they’re asking for seed funding at the wrong stage in their development. 

Seed funding is the most critical round of early stage funding. As the final funding stage before entering the Series A, B, and C rounds, it will provide your startup with the capital it needs to perfect your prototype and enter the market positioned for success.

Here’s what you need to know about securing seed funding and what your investors want to see in your pitch:

What Is Seed Funding?

Seed funding is the first official equity stage of funding that follows the pre-seed funding stage. Seed funding often comes from angel investors as well as the founders themselves and their friends and family. It can also come from institutional sources, such as Florida Funders , a hybrid venture capital firm and angel investor network based out of Tampa that discovers, funds, and builds early-stage technology companies.

Seed funding is one of the earliest stages of funding, used to form the company itself, and thus, startups in this stage are fairly high risk. While you should have some traction, your startup likely hasn’t had the chance to prove itself in the market yet.

What’s The Difference Between Early Stage Funding And Seed Funding? 

All seed funding is early stage funding, but not all early stage funding is seed funding. Early stage funding is an umbrella term used to describe the two stages of funding that take place before your startup gets into Series A, B, and C funding rounds. Within early stage funding are two stages: pre-seed and seed funding. 

Learn More About Pre-Seed vs. Seed Funding

What Is Early Stage Funding? 

Early stage funding is the funding raised before getting into your startup’s first significant round of venture capital funding. It includes both pre-seed and seed capital, which is used to help your startup become self-sufficient and profitable or to help you get to your next funding round so additional capital can be raised. It’s often used to create a minimum viable product, for extensive market research, or to pay your founding team. 

The investors in early stage funding, who are most often angel investors, typically provide capital in exchange for a large stake in the company. 

Sources Of Seed Stage Funding

In addition to bootstrapping your startup or getting capital from friends and family, there are several sources where your startup might find seed stage funding, including angel investors like myself.

• Angel investors – Recently, angel investors who provide funding at this stage to multiple companies at the same time have begun to be referred to as “super angels.” They’re typically investing their own money and will lead the capital raised in multiple rounds, beginning with the seed stage.
• Micro VC firm – A micro venture capital firm invests pools of money sourced from various investors into projects that are too young to capture the interest of traditional VC firms.
• Genesis VC round – This is a new type of seed market that’s developed within the past few years. Genesis VC funding usually comes with capital of around $600k or less, often in the form of a convertible note from small seed funds. This round is designed for pre-product startups with a small team if any.
• Incubator – Incubator funding offers seed investments that are similar in value to the investments of accelerators. Oftentimes, cities will offer these to startups to foster business development in the local area.
• Accelerator – Accelerators often provide mentoring, professional services, a workspace, and a small seed investment (usually around $25k) in exchange for a stake in the company.
• Corporate seed funds – Large established enterprises like Google sometimes offer seed funding to startups working on innovative tech solutions with the potential to eventually become acquired by the larger company.
• Crowdfunding – Crowdfunding has gained a lot of traction in recent years, becoming a major source of seed stage funding for young startups. One of the most popular crowdfunding startups is Kickstarter, which helped startups raise a total of 5.43 billion in 2020 alone. 

Debt and Convertible Funding

• Debt – Debt funding usually comes in the form of bank loans or loans with interest from family and friends. At times, angel investors or even venture capitalists may issue a loan rather than an equity investment.
• Pure Equity – For most early-stage companies it is difficult to get a priced round. This includes equity investments, which are based on a valuation. However, VCs may be able to give a dollar valuation and offer pure equity investments without subjecting yourself to a downround or limitation. Pure equity rounds are one-time events, and there’s just one lead investor who agrees to the terms.
• Convertible Notes or SAFE (Simple Agreement for Future Equity) – Usually based on a future round of financing with a discount, this is the most company-friendly of convertible debt instruments. In a convertible note or SAFE, you’re setting your own valuation, but you have the power to set a cap on the valuation and offer a discount to SAFE or convertible investors in the next round. Convertible or SAFE investments give the entrepreneur the opportunity to keep raising money on those terms without a strict deadline. There is no lead investor, all investors come in at the same level.

Due to how startup-friendly the terms of convertible notes or SAFE investments are, most rely on these two forms of investments at the seed funding stage.

Angel Investors vs Venture Capitalists:

Angel investors and venture capitalists are two common sources of seed stage funding. These two kinds of funding are similar in some ways but have more differences overall.

The source of both of these types of funding comes from wealthy individuals, and both VC funding and angel investments are given to riskier, early-stage startups, often in the tech space. While angel and VC funding are usually in exchange for equity in the company, they both may come in the form of convertible debt as well, which gives your young startup the opportunity to raise large sums of money quickly, even with a low valuation.

Beyond that, there are several distinctions between these two kinds of funding.

Venture Capital Funding:

• Comes from a professionally managed fund of pooled investments, managed by the VC firm
• Has additional requirements for funding, like a board seat or an experienced founder
• Typically starts around $1M
• Is primarily a financial investment

Angel Investor Funding:

• Comes directly from the angel investor’s personal wealth
• More likely to invest early on
• Can start as low as $10k
• Often includes mentorship and guidance outside of the financial investment

How To Raise Seed Funding

Just as your startup will eventually have a systematic process for your sales funnel, you’ll need a similar approach to raise seed funding. Think of it in terms of three key steps in your fundraising funnel:

• First, find potential investors to fill the top of your funnel. You can track these investors down through warm introductions (preferred), inbound interest in your startup, or even cold outreach. Make sure these investors are qualified, meaning they align with your startup vision.
• Next, you’ll want to move these investors through the funnel by nurturing them with traditional marketing strategies before it’s actually time to raise the capital. One great way to do this is by sending them a condensed version of your quarterly update.
• Finally, you’ll move these investors to the bottom of your sales funnel by asking for a pitch meeting, presenting your pitch deck, and hopefully closing the deal. It’s imperative to also continue building relationships with investors who get on board, as they can become your biggest fans and evangelists for your startup, helping you attract additional investors in later funding rounds.

When To Start Looking For Seed Funding

To secure seed funding, you need to have completed the pre-seed round and be able to eloquently share your founding story with potential investors. This story should include your business model (your “what”), the reason you decided on this idea (your “why”), your unique solution (your “how”), and your estimated market size (your “who”) as well as answers to the questions, “Why now?” and “Why you?”

Most investors, especially angel investors like myself, will be looking for more than just an idea and a reputation. We want to see some prototype development and some level of consumer demand. You’ll need to prove your traction to us.

How To Choose An Investor For Seed Funding

Selecting the right investor is a critical step in your startup’s journey. If you choose one that doesn’t fit your startup’s vision or align with your goals and needs, the business development process will be a tough one. Here are five considerations to keep in mind when reviewing your potential investors:

• Type of Startup – You need to know exactly what business model you’re using and the industry you’ll be entering so you can find an investor whose experiences and interests align with your startup.
• Funding Needs – There can’t be any question about the amount of funding that you need to grow and make it to the next funding round. This helps potential investors understand the financial opportunity available to them.
• Trust – If an investor is skeptical of your idea, you don’t want them on your team. They should have trust in your team, your solution, and your business plan so you know they will stay by your side when things get tough during the early stages of business development.
• Expertise – A nascent startup needs feedback and guidance just as much as it needs funding. While a VC firm may offer limited guidance, an angel investor is more likely to provide mentorship, driven by their personal experience in the field.
• Funder’s Financial Health – It’s critical that an investor has the financial means to invest in your startup, otherwise they may be under considerable financial stress throughout the earliest stages of business development. 

How To Approach An Angel Investor For Seed Funding

Before you send out emails or start cold calling angel investors to ask for a pitch meeting, take a step back and do the following:

• Research them. Get to know their background and how it relates to your startup. 
• Identify previous investments . Gather information about the previous startups the investor has funded and look for similarities in your startup.
• Pinpoint additional support. Determine how this investor might be able to help you in areas beyond funding, like network connections or mentorship.
• Gauge financial ability. Ideally, your seed stage angel investor will be able to participate in later funding rounds, so gauge their financial abilities to continue investing.

What Matters To Investors

Once you have done your due diligence in preparing to approach an angel investor, you should continue to prepare for your upcoming pitch meeting. We’ll be looking for four main components within your pitch:

What do you have to offer that is ground-breaking, world-changing, or entirely unique? Why is right now the best time to introduce your solution? What benefit will your solution provide, economically or otherwise?

Address the innovation of your startup in great detail – this is the foundation of your presentation and should focus more on the technology of your innovation, not your marketing plan. 

How solid is your understanding of your industry market? What competitors do you have, or what incumbents are you going up against? Is there a large enough market need to warrant your solution? What impact will your idea have on the competition? Why have other players missed this opportunity previously?

In the seed stage, an idea is not enough for an angel to agree to invest. We need to see traction in the market and proof that there’s a need for what you’re bringing to the table.

Management Team

Who are you, and why are you the best person to lead this startup? What skills and experience do you offer? What skills does your team still need? Are you planning to become CEO for the long-term, or hand the role off to someone else?

Since startups at the seed stage are so new, angel investors like myself know that we’re investing in you and your founding team just as much as we’re investing in your business, so we want to get to know the team behind the great idea, too. Focus on you, your goals, and the technical skills you have to offer. 

What goals will our financing help you achieve? What level of funding will you need in further rounds? What is your total cash burn rate per month?

While we won’t expect to see all of your detailed financial documents, we will want to see solid financial projections within your business plan. We also want to know how you plan to use the capital we may provide, and what additional financial needs you may have. 

The Do’s and Don’t Of Seed Funding

I’ve heard enough pitches and worked with enough startups to know there are some critical components to how you approach the process – and art – of securing seed funding. 

• Raise your essential funds, and then get back to the real work of building your startup.
• Approach every meeting and social interaction as a chance to network and advance your startup.
• Prioritize meetings with the angel investors most likely to fund.
• Move expeditiously, handling the formalities as quickly as you can after securing financing. 
• Work hard and execute better than the competition to get investors interested.
• Hold your team to a high ethical standard to build and protect your reputation.
• Get comfortable with hearing “no,” and learn how to ask for feedback so you can get better.
• Find the sweet spot between humility and confidence, and stay there.
• Lie, cheat, or mislead potential investors.
• Expect to have a check in hand after the first meeting.
• Lag in communication – especially follow-up.
• Be the only one speaking in the room.
• Use unrealistic market size projections to try to impress.
• Pretend to be an expert where you’re not.
• Get swept up in unimportant details.
• Over-optimize your company valuation.
• Dismiss investor hesitancy. Learn from it instead.

How To Calculate The Amount Of Funding Needed For The Seed Stage

As the founder, the number you’re looking to raise during your seed funding round is up to you, but that doesn’t mean you want to pull this figure out of thin air. The goal should be to reach your next round of funding and sustain operations until then, or to reach profitability.

To turn that concept into a hard figure, you’ll need a solid understanding of your startup’s essential costs – team member salaries, cost of acquiring a new customer, cost of customer retention, etc.

How Much Stake Is Required?

In return for the funds you receive, be prepared to provide your angel investors with a stake in your company in return. Most seed funding rounds will require you to offer up to 20% ownership in your company, or 20% dilution. If you can manage to give up only 10%, that’s great, but be prepared to offer more, up to 25%. 

Company Valuation 

When you’re setting your own valuation, you don’t want to set it too low or too high. If you set it too high and are successful at a round of 50 million, for example, you’ll face increased pressure from more sophisticated investors to conform to a more reasonable valuation. If you have a down round after a high initial round, the optics won’t be good. Keep your valuation reasonable so you can always show progression.

The percentage of ownership an investor gets in the company is based on the funding provided and the ratio of that new funding relative to the post-money valuation. For example, if your startup is valued at $3 million going into your seed round, and an angel agrees to give you $1 million of funding, your new post-money valuation would be $4 million. And since that angel’s investment accounts for 25% of the company valuation, they would then own 25% of your startup.

How To Submit A Business Plan

Submitting your business plan is the final step to securing seed funding. If an angel investor likes your pitch and wants to see your formal plan before sealing the deal, you don’t want to make a mistake that could cost you the opportunity.

Your business plan shouldn’t be long and it doesn’t need to be fancy, it just needs to address the main points of your business, product, market, and traction. 

While it might be tempting to submit your business plans online through angel networks and VC websites, that’s not going to get your business plan in front of the decision-maker. Investing is a referral-based business, so try to find a connection to make a warm introduction and pass your plan along to the right people. 

Steve MacDonald: Seed Stage Angel Investor and Mentor

Steve MacDonald is a serial entrepreneur and successful startup founder with over $400mm in venture exits. He founded MacDonald Ventures with the goal of finding, financing, and nurturing the seed-stage tech startups that will change our world with a particular focus on the emerging tech epicenter in Tampa Bay. If you’re a tech founder with a game-changing, innovative tech solution, reach out .

Seed Funding FAQ 

How can i get seed funding for an app.

There are many sources for seed funding for an app, including angel investors, crowdfunding, bootstrapping it, incubators, accelerators, and more. 

Can I get seed funding for an idea?

No, angel investors like myself will need to see traction to consider funding.

How do you raise seed funding?

First, find potential investors. Then, nurture these leads through networking and warm introductions. Finally, ask for a pitch meeting, and present a compelling pitch deck.

How do you secure seed funding for a startup? 

You’ll be able to secure seed funding by finding the right investors, presenting a compelling pitch deck/business plan, and quickly taking care of the necessary formalities before closing the deal.

What is pre-seed funding?

Pre-seed funding is the earliest stage of funding for a startup, during which friends/family or angel investors typically invest in exchange for equity in the company. This kind of funding helps a startup get off the ground with initial development.

What is seed-stage funding?

Seed stage funding comes after seed funding and is the first official equity funding stage, typically financed by angels or VC firms. 

How does seed funding work?

First, you may want to ask friends or family to invest. Then, begin networking with angel investors, use crowdfunding platforms, or join incubators or accelerators.

How do you apply for seed funding?

There’s no standard application process. You’ll need to find investors, gauge their interest, request a pitch meeting, and present your pitch. Alternatively, you could choose to apply through accelerators or incubators.

What is hedge fund seeding?

Hedge fund seeding is the money a hedge fund tries to raise to pay for its initial launch and break-even as a company within a year of inception.

What is seed funding venture capital?

Seed funding venture capital is seed funding sourced from venture capital firms, which are professional money management firms that invest in startups. They usually manage one or more venture funds that they use to invest capital into startups

@STEVEMACDONALD.MV | #FUNDINGPHENOMENONS

How to Get Pre Seed Funding | The Ultimate Startup's Guide

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What is Pre-seed Funding?

As you embark on your entrepreneurial journey, remember that your first steps often shape the trajectory of your entire venture—and pre-seed funding is the starting point that sets you off. This article aims to simplify the complex world of pre-seed funding, helping you to understand the strategies, processes, and how to manage your startup effectively during this crucial stage. We'll arm you with vital insights and practical tools, serving as your beacon as you navigate the unpredictable yet thrilling twists and turns of the pre-seed stage with assurance and grace.

Importance of Pre-Seed Funding

In your startup voyage, pre-seed funding is the prologue that ignites your innovative idea and transforms it into a tangible reality. The role it plays is significant, often setting the course of your budding enterprise. Pre-seed funding provides the much-needed resources that enable you to undertake vital early-stage activities, such as in-depth market research, building an initial prototype, or piecing together an exceptional team. These aren't trivial tasks—they lay the solid groundwork for your startup's unfolding narrative.

Managing this stage with clear sight and a firm grip can smoothen your path to future funding rounds and simultaneously bolster your startup's standing amid the vibrant entrepreneurial landscape. Consequently, a sharp understanding and adept acquisition of pre-seed funding is a vital chapter you should include in your entrepreneurial playbook.

Understanding Pre-Seed Funding

A closer look at pre-seed funding.

At its core, pre-seed funding serves as the initial financial springboard for entrepreneurs, enabling them to jumpstart the earliest phases of their startup. This preliminary financial injection—the first burst of external capital—is primarily aimed at molding a fledgling concept into a market-ready product or service. The hallmarks of pre-seed funding are unmistakable: investment sums tend to be smaller than later rounds, and the benefactors often comprise friends, family, or early-stage VCs such as Pitchdrive. This early financing phase lays the groundwork for feasibility studies, crafting a minimum viable product (MVP), conducting market research, and occasionally, assembling a core team. With pre-seed funding, your startup plants the initial seed that sets the stage for future prosperity.

The Differences Between Pre-Seed, Seed, and Series A Funding

The financial support you receive in the early stages of your business—pre-seed, seed, and Series A funding—each serves to accelerate your idea towards reality, albeit at different stages and with different objectives.

Seed funding, often heftier than pre-seed, is earmarked for further development and market testing of the MVP, expanding operations, and recruiting key team members. This stage's benefactors usually include angel investors and venture capitalists specializing in early-stage funding.

Series A funding, conversely, is centered around optimization and expansion. Once your startup has demonstrated a proven product-market fit and a degree of traction, Series A funds are employed to refine your business model, boost your user base, and begin scaling more assertively. Capital for this round is typically sourced from venture capital firms, and the investment sum noticeably exceeds that of the pre-seed or seed stages. Each of these funding stages, albeit distinct, contributes indispensably to your startup's journey towards fruition.

Navigating Your Pre-Seed Funding Options

Venturing into the entrepreneurial landscape, you're likely to find yourself standing at the crossroads of diverse pre-seed funding options. Here, you may feel like Alice in Wonderland, overwhelmed by the labyrinth of choices. Yet, with understanding and a dash of courage, you can navigate these options with aplomb.

Friends, Family and Fools (FFF)

Let's start with the tried-and-true route of raising funds from friends and family. This path, bathed in the warm glow of familiarity, offers comfort and convenience. It's not just about money, but about garnering trust and support from those closest to you. Your loved ones' belief in your vision could be the first stepping stone on your startup's journey.

However, tread this path with caution. Personal relationships and business make for a tricky blend. You'd do well to remember that clear-cut agreements and transparency are your best allies. Keep the lines of communication open and avoid murky waters that might endanger your relationships or your business.

Pre-seed VCs

Next in line, consider the avenue of early-stage venture capital firms, such as Pitchdrive. These are not just reservoirs of capital, but also troves of experience and knowledge. Navigating these waters gives you access to mentorship from seasoned professionals, insights from industry insiders, and the kind of guidance that could spell the difference between sinking and sailing smoothly.

Ready to fundraise? Sign up with Pitchdrive today!

Angel Investors

Angel investors are another breed of investors you might want to consider. These are high-net-worth individuals who provide financial backing for early-stage startups. They operate with a far-sighted vision, scouting for potential rather than immediate returns. Tapping into an angel investor's support can be about much more than capital. They often bring their own entrepreneurial experience, industry connections, and valuable advice to the table.

But attracting an angel investor is an art in itself. It requires a compelling pitch, a robust business plan, and a shared vision. You'll need to put your best foot forward, showcasing not just your startup's potential but also your passion and perseverance.

Accelerators and Incubators

Accelerators and incubators form another vibrant lane in this funding highway. While the terms are often used interchangeably, each has a distinct identity. Incubators nurture business ideas, providing a supportive environment for them to grow over a longer period. They're like greenhouses, providing optimal conditions for your startup seedling to germinate and develop strong roots.

Accelerators, on the other hand, are more intensive and operate over a fixed, shorter time frame. They work like a growth hormone, aiming to scale up your business at a rapid pace. Apart from funding, they also provide mentorship, educational resources, and often access to a strong network of industry connections.

Traditional routes, however, are not the be-all and end-all. Keep the spirit of adventure alive and explore the wide spectrum of alternatives to well-known platforms like Y Combinator. The startup ecosystem today offers a constellation of such options, each promising not just capital, but also a nurturing community and a host of resources to help your business sprout and grow.

Dive in, headfirst, to comprehend the scope of these options. You might find your treasure trove in these Top European Alternatives for Y Combinator in 2023 .

Remember, no matter the path you choose, each funding source is a potential catalyst for your startup's journey. Every route holds unique opportunities to manifest your entrepreneurial dreams into tangible reality. Though the way might seem labyrinthine, with every step, you move closer to transforming your vision into a thriving enterprise.

Preparing Your Startup for Pre-Seed Funding Journey

Assessing your startup's pre-seed funding readiness.

The first critical milestone on your pre-seed funding adventure involves taking a hard look at your startup's readiness for investment. This means having a solid business idea, a clear understanding of your target market, and ideally, a preliminary business plan or an early-stage prototype. Keep in mind that investors are not just interested in capital infusion, but in the promise of potential, a unique value proposition, and a compelling vision. They often measure this promise in the founder's passion, expertise, and commitment to the venture. Pre-seed funding isn't just about a cash injection—it's a strategic alignment of your startup's mission with a shared vision for growth and success.

Need more insight into what angel investors look for in startups? Get more info here: What Should Angel Investors Look for in a Startup

Cultivating Your Pre-Seed Funding Strategy

Building a robust pre-seed funding strategy sets the tone for your startup's journey. Here are the essential steps to map out an effective course:

• Carve out your business goals and milestones: Clearly defining your business objectives and key progress markers is crucial. These goals, whether it's developing a minimum viable product (MVP), acquiring a certain number of users, or hitting the break-even point, illustrate your vision and the path you've charted to realize it.
• Perform exhaustive market research: Understanding the market terrain, your target customers, and your competition is critical. Thorough market research not only validates your product's demand but also shapes your business model and helps pinpoint key differentiators.
• Identify potential investors and partners: Not all investors are made equal. Your strategy should include identifying the right financial partners that sync with your business niche, resonate with your vision, and bring more than just cash to the table.
• Craft a compelling pitch deck: Your pitch deck is the encapsulation of your startup's narrative. It should effectively articulate your business idea, market research findings, team strengths, and financial projections, resonating with potential investors.

Need some help with your pitch deck? Grab your pitch deck template

Already have the best pitch deck? Sign up with Pitchdrive today!

• Set a realistic valuation for your startup: Pre-seed funding often implies relinquishing some equity in your startup. A balanced, defensible valuation is crucial to strike a fair deal between the capital you raise and the equity you give up. Valuation will often be further refined and negotiated during conversations with your investor.

Check this article to see what to expect from investors

Engaging with Investors

In your startup's pivotal journey, interacting with investors for pre-seed funding could significantly steer its course. This process extends beyond securing capital—it's about establishing partnerships, gaining mentorship, and validating your business idea. Whether you're engaging with angel investors, venture capitalists, or leveraging online platforms, understanding the subtleties of each approach can boost your chances of successfully securing much-needed pre-seed funding.

Angel Investors vs. Venture Capitalists

In the realm of startup financing, both angel investors and venture capitalists play vital roles, each offering unique benefits. Angel investors are typically affluent individuals investing their own money, often guided by personal interest and a desire to mentor budding businesses. They offer a more flexible and personal approach, usually expecting a slower return on investment.

On the flip side, venture capitalists are professionals managing a fund, looking for high-growth companies with the potential to offer significant returns. Their involvement often brings along rigorous processes, larger funds, and access to an extensive network. Your choice between the two will hinge on your startup's stage, funding requirements, and the type of investor relationship you seek.

Learn about everything an angel investor ever wanted

Expanding your Network

A report published this week by Diversity VC and the British Business Bank has highlighted the significant role of networking in the startup ecosystem. According to their findings, startups that land in VCs’ laps via so-called ‘warm introductions’ are 13 times more likely to be funded by them than startups which come to their attention via ‘cold’ pitch deck submissions.

This underscores the art of networking as a potent tool in the quest for pre-seed funding. Cultivating relationships with potential investors and influential individuals can significantly enhance your fundraising efforts. Participating in industry events, startup meetups, and investment forums provide opportunities to connect with potential investors, garner valuable advice, and secure referrals. Moreover, nurturing relationships with fellow entrepreneurs can lead to beneficial partnerships and shared learning experiences.

Remember, in the world of startups, your network often equates to your net worth.

Still not sure how to network? Read more about startup networking

Leveraging Online Platforms and Startup Communities

In the digital era, online platforms and startup communities have emerged as indispensable resources for connecting with investors. Crowdfunding platforms, online pitch events, and social networks like LinkedIn offer avenues to showcase your startup to a broad spectrum of potential investors. Startup communities, such as those on Slack or Facebook, provide platforms to share experiences, seek advice, and connect with investors actively scouting for promising ventures. Utilizing these digital resources can supplement your networking efforts, helping you cast a wider net in your pursuit for pre-seed funding.

Pitching to Investors

Mastering the pitch is a blend of art and science, demanding comprehensive preparation, eloquent storytelling, and the confidence to navigate challenging questions. As we delve into the strategies for successful investor meetings and the subtleties of confident presentation, our aim is to arm you with the insights required to transform your pitching stage into a launchpad for success.

Strategies for Effective Investor Meetings

An investor meeting is a golden opportunity to secure not just funds, but invaluable partnerships and mentorship for your startup. Preparing for these meetings involves thorough research about the investors—understanding their interests, past investments, and what they value in a startup. Customizing your pitch to align with their interests can significantly enhance your chances of success.

Furthermore, clearly outlining your startup's vision, business model, target market, and financial projections is crucial. Demonstrating how the investment will accelerate growth and sketching out a clear exit strategy can make your pitch more persuasive. Lastly, being receptive to feedback and showing a willingness to adapt projects your startup as a promising and flexible venture.

Learn more about How to Create an Effective Video Pitch for Investors

Presenting Confidently and Addressing Questions

In pitching to investors, confidence and clarity are as critical as the content of your presentation. Investors often invest in people as much as they invest in ideas. Displaying confidence in your vision and team.

Looking for extra tips and tricks to perfect your pitch? Check our guide to boost startup success with investors

Navigating the Due Diligence Process

The due diligence process is a vital aspect of your pre-seed funding journey where potential investors take a magnifying glass to your startup. They'll often evaluate your business model, team, financials, and legal compliance, all to reduce their potential risk. Familiarizing yourself with this process and preparing accordingly can considerably boost your odds of securing that crucial funding.

Understanding and preparing the Due Diligence Process

Investor due diligence kicks off with an in-depth appraisal of your startup's overall feasibility. This includes a critical review of your business plan, an analysis of your market size and potential, and an assessment of your team's competency to bring the plan to fruition. Arm yourself with a meticulously crafted, data-backed business plan, realistic financial projections, and a compelling showcase of your team's expertise and capabilities. Have this information at your fingertips, neatly organized to ensure a seamless due diligence process.

Safeguarding Your Intellectual Property Rights

For countless startups, their intellectual property (IP) stands as their most prized asset. Investors will want to ascertain that your IP is adequately safeguarded and that you possess the required rights to utilize it. This could encompass patents, trademarks, copyrights, or trade secrets. It's advisable to carry out an IP audit to ensure all your IP assets are legally safeguarded and be ready to present documentation proving your ownership or usage rights during the due diligence process.

For extra tips, read this article on how to safeguard your startup's IP .

Getting to grips with and preparing for the due diligence process can not only enhance your likelihood of securing funding but also assist you in identifying and rectifying any potential vulnerabilities in your startup.

For more insights, read our guide on Preparing for Due Diligence: Essential Tips for Early-Stage Startups .

Negotiate the right deal

Negotiating terms and conditions.

While receiving a funding offer is certainly a cause for celebration, it's of utmost importance to meticulously dissect the proposed investment terms and conditions. This includes assessing the investment quantum, equity stake, your startup's valuation, voting rights, exit strategy, and provisions relating to future financing rounds. Each of these components can profoundly impact your startup's trajectory and your stake in the venture.

Legal advice can be an indispensable ally in making sense of the intricate details and negotiating favorable terms. Remember, the ultimate goal isn't merely to acquire funding, but to propel your venture toward success under conditions that resonate with your long-term vision.

Undertaking Comprehensive Investor Due Diligence

Due diligence shouldn't be a one-way road. Concurrently with investors assessing your startup, you should also engage in extensive research on your potential investors. Understanding their investment philosophy, portfolio, involvement with other startups, and market reputation can yield valuable insights. Conversing with founders they've previously invested in can unveil their work ethics, commitment, and the value they contribute beyond just monetary capital. This ensures that the investor you choose to collaborate with brings not just financial backing but also strategic guidance, mentorship, and an influential network indispensable to your startup's triumph.

Lastly, as a bonus tip, you can always schedule calls with some of the portfolio founders from VCs you’re talking to. Who better to explain the actual processes and support from VCs than their own portfolio? Usually portfolio founders are always down to help out, as they know what it’s like to be in fundraising mode.

Sealing the Deal

Creating a legal and financial mix.

Finalizing a pre-seed funding round involves navigating complex legal and financial processes. This typically includes the crafting and reviewing of investment documents, compliance checks, and tying up financial arrangements. It's advisable to involve legal and financial advisors to help you comprehend the implications of each clause in the agreement and to confirm the financial arrangements meet regulatory norms. Further, it's crucial to maintain updated and easily accessible business and financial records. Although challenging, these processes ensure a transparent and compliant transaction, laying a robust foundation for your future fundraising endeavors.

Final Steps: Investment Agreements

Finalizing the investment agreements symbolizes the completion of the pre-seed fundraising process. These agreements, often commencing with a term sheet and followed by a detailed contract, lay out the terms and conditions of the investment, encompassing the amount of capital, equity stake, investor rights, and clauses related to future financing rounds. It's imperative to scrutinize these documents meticulously, ideally with legal counsel, before affixing your signature. Upon the signing of the agreement and transfer of funds, the deal is officially sealed, paving the way for your startup's subsequent growth phase. Bear in mind, this isn't just the finale of your fundraising endeavor; it's the inception of a partnership and a collaborative journey toward shared success.

Managing Pre-Seed Fundraising

Navigating the waters of fund allocation and utilization, drafting a comprehensive financial blueprint.

The initial stride towards proficient fund management is the creation of a thorough financial blueprint and budget. This plan must encompass your startup's crucial financial objectives, estimated income and outflows, cash stream, and emergency funds. Your budget should reflect your business strategy, designating funds to accomplish specific milestones such as product advancement, user acquisition, and market proliferation. Continually updating and revising this plan allows for necessary modifications as your startup advances and morphs. Ultimately, a well-curated financial plan ensures judicious use of your pre-seed fundraising and showcases financial responsibility to present and potential investors.

Strategizing Expense Priorities and Resource Allocation

Pre-seed stage startups typically function under stringent financial limitations, thus, strategizing expense priorities and resource allocation becomes vital. This involves ordering your startup's needs and directing funds towards areas that promise the highest growth potential and return on investment. For instance, early stages might necessitate investing in product development and customer acquisition. Concurrently, resource allocation decisions—like recruiting essential personnel or investing in technology—should correlate with your startup's strategic objectives. Strategizing expenses and resource allocation ensures your pre-seed fundraising is effectively utilized, propelling your startup towards its established milestones.

Assembling a Robust Advisory Board

Recognizing and engaging proficient advisors.

Creating a potent advisory board begins with recognizing and engaging proficient advisors whose skillsets and experiences correspond to your startup's needs. Seek individuals with a commendable track record in your industry or those who bring specialized expertise in critical areas—such as finance, marketing, technology, or strategy. Recruitment can occur through your network, at industry gatherings, or even by directly contacting individuals whose work you esteem. While recruiting, it's crucial to elucidate your expectations and the potential gains from this advisory relationship, ensuring a mutually beneficial partnership.

Utilizing their Expertise and Network

Beyond their capital and guidance, your investors' network and expertise are potent resources that can fuel your startup's growth. Their connections can pave the way to potential clients, partners, or even future rounds of funding. Similarly, their expertise in specific fields, their understanding of market dynamics, and their strategic acumen can be harnessed to enhance your startup's operations, strategy, and positioning.

Once your advisory board is assembled, the real work of leveraging their expertise and network begins. Regular meetings, updates, and brainstorming sessions can maintain their engagement and keep them informed about your startup's progress and challenges. Their wisdom can guide your strategic decisions, anticipate industry trends, and navigate obstacles.

Furthermore, their network can unlock doors to potential clients, partners, and even future investors. Building a robust, mutually beneficial relationship with your investors and the advisory board can thus serve as a key catalyst in your startup's journey toward success. Remember, an advisory board is not just about their credentials; it's about their active contribution and influence on your startup's growth journey.

Monitoring Key Metrics and Achievements

Defining measurable goals and kpis.

In the dynamic ecosystem of a startup, defining measurable goals and Key Performance Indicators (KPIs) is crucial to maintain your venture's trajectory. These could encompass product development milestones, user acquisition targets, revenue objectives, and customer satisfaction metrics. KPIs provide quantifiable benchmarks that help assess progress, recognize gaps, and realign strategies if necessary. These metrics should be SMART—Specific, Measurable, Achievable, Relevant, and Time-bound—to enable effective tracking and management.

Curious what are the main KPIs that early startups should track?

Consistently Observing and Reporting Progress

With your goals and KPIs established, consistently observing and reporting progress becomes critical. This includes not just tracking metrics but also analyzing trends, comparing actual versus projected performance, and understanding the reasons behind any discrepancies. Regular reporting—through dashboards or progress updates—keeps your team and investors informed, promotes transparency, and boosts confidence in your startup's management. It also provides an opportunity to celebrate triumphs, learn from setbacks, and constantly enhance your strategies to realize your startup's vision.

Harnessing Investor Relationships

Soliciting guidance and support from investors.

Securing pre seed funding from investors is not solely about capital influx—it's about cultivating partnerships that can significantly influence your startup's trajectory. Your investors can serve as invaluable sources of guidance and support, especially in manoeuvering the challenges typical of a startup's early stages. Regular communication—sharing updates, discussing issues, and seeking advice—fosters a robust relationship and allows you to benefit from their experience and insights. Remember, your investors have a vested interest in your success; their knowledge and expertise can be instrumental in steering your startup towards its goals.

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Tackling Challenges in Pre-Seed Funding

Decoding common rejection reasons.

‍ Frequent reasons for rejections often relate to aspects such as the market size being too limited, the business model lacking sustainability, the product failing to demonstrate clear differentiation, or even the team being perceived as ill-equipped to execute the vision. In some instances, the timing may be premature, with the market not being ready for your solution. Deconstructing these reasons with an open mind can provide a roadmap for necessary adjustments in your strategy, pitch, or product.

If you want to dive deeper into this, read here how to overcome common objections from investors during your pitch

Gleaning from Failures and Improving Your Approach

‍ Each rejection or setback is a learning opportunity that can help refine your approach. Extracting constructive criticism from these experiences can help identify gaps in your startup's value proposition, pitch, or business model. It's essential to step back, objectively analyze the feedback, and make necessary enhancements. This could involve improving your product, refining your pitch, fortifying your team, or even reassessing your market strategy. The ability to learn from failures and adapt your approach not only amplifies your chances of securing funding but also strengthens your startup's foundation.

Regulating Cash Flow and Runway

Tactics for extending your runway.

Prolonging your runway is crucial to sustaining your startup during its early stages. This requires careful financial planning and strategic decision-making. Consider reducing unnecessary expenditures, delaying non-critical hires, or renegotiating contracts with vendors. Alternatively, it could involve finding ways to expedite income, such as seeking upfront payments, shortening payment cycles, or exploring additional revenue streams. Every dollar saved or earned extends your runway, affording your startup more room to achieve its objectives and milestones.

Navigating Unexpected Financial Challenges

Unexpected financial challenges—like unforeseen expenses, revenue shortfalls, or changes in market conditions—can strain your cash flow and shrink your runway. Navigating these requires agility, resilience, and creative problem-solving. This could mean finding ways to cut costs, exploring bridge financing, or pivoting your business model to adapt to new market realities. Having an emergency fund and a contingency plan can also aid in navigating these challenges. Remember, the goal is not just to survive these challenges, but to emerge stronger and more resilient.

In Conclusion

Embarking on the journey of pre-seed funding may appear overwhelming, but with the right tactics and insights in your arsenal, it transforms into an exhilarating stage of moulding and fuelling your startup's growth.

Quick Recap

We've journeyed from understanding the basic definition and traits of pre-seed funding to distinguishing between pre-seed, seed, and Series A rounds.

Our exploration took us through preparing for pre-seed funding, presenting compelling pitches to investors, accepting funding proposals, and finalizing the agreement. Moreover, we've shed light on managing pre-seed capital by careful allocation and utilization, constructing a robust advisory board, and monitoring pivotal metrics. Finally, we discussed surmounting obstacles and leveraging investor relationships for the benefit of your startup.

The Power of Perseverance and Resilience

The path to pre-seed fundraising might be laden with denials and stumbling blocks, but your success will be determined by your tenacity in confronting these challenges. Absorb lessons from your failures, enhance your approach, and remain steadfast. Your patience and determination will ultimately bear fruit.

Final Words of Wisdom

Finally, it's crucial to remain flexible and receptive to new learning opportunities. The dynamic environment of startups requires such an attitude. Consistently assess your readiness, polish your tactics, monitor your progress, and don't hesitate to alter your direction when necessary. With these strategies in your toolkit, you're more than prepared to successfully steer through the pre-seed funding stage, putting your startup on a trajectory towards success.

Interested in learning more? Check the rest of the content in the Academy

What is pre-seed funding?

Pre-seed funding is the initial capital raised by entrepreneurs to validate their business idea, build a prototype, and conduct market research. It is a crucial step in the startup journey as it allows entrepreneurs to prove the viability of their business idea before seeking larger investments. Pre-seed funding is often sourced from the founders themselves, friends, family, or angel investors.

What is a good amount of pre-seed funding?

A good amount depends on what you need, but if you’re located in Europe we usually recommend raising between €100k and €1M of pre-seed funding.

What are pre-seed funding examples?

There are numerous examples of successful startups, but here are some good pre-seed funding examples from our portfolio. 1. Keaz: Raised €600K to unlock WhatsApp Marketing for small and local businesses. 2. Wonnda: Secured €1M funding to redefine product sourcing. 3. Koble: This startup raised £1 million to re-engineer startup investing with Artificial Intelligence. 4. liftOS: Raised €1M to reimagine how teams interact with software tools. 5. Revend: This startup raised €1 million to defend e-commerce revenue with an AI-powered monitoring tool. You can check the stories of other seed or pre-seed rounds from our portfolio companies on our website.

What is the difference between pre-seed and seed funding?

Pre-seed and seed funding are two distinct stages in the startup funding process. Pre-seed funding is used to validate the business idea and prepare for future funding rounds, while seed funding is used to start operations and achieve initial growth. Seed funding is typically larger than pre-seed funding and often comes from venture capital firms or angel investors who see potential in the business.

How to get pre-seed funding?

Getting pre-seed funding involves a combination of preparation, networking, and persuasion. Entrepreneurs need to prepare a compelling business plan and prototype, network with potential investors, and pitch their business idea effectively. It's also beneficial to demonstrate market validation, such as customer interest or early sales, to increase the chances of securing pre-seed funding.

what is pre seed funding used for

Pre-seed funding is used for providing capital for product development, market research, team building, and initial operations. It helps validate business ideas, protect intellectual property, and gain initial traction. Typically sourced from angel investors, friends, family, or early-stage venture capital firms, pre-seed funding lays the groundwork for future funding rounds.

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From Startup to Success: Business Growth Stages

Updated: March 11, 2024

Published: September 14, 2023

What do businesses and butterflies have in common? Both have distinct stages of transformation they must undergo in order to achieve their full potential. 

Before emerging as the beautiful creatures they are, butterflies must progress from egg to caterpillar to chrysalis; businesses must also push through growth stages to reach true and lasting success. 

Each stage serves a purpose, allowing businesses to adapt, learn, and evolve. 

Understanding the importance of these stages and embracing the challenges and opportunities they bring allows businesses to grow their wings and soar to new heights.

What are business stages? 

Business stages are the different phases of a company’s life cycle, which include:

• Seed stage/startup stage: The initial phase where the business is launched and establishes its presence.
• Growth stage: A period of increasing customers and market share.
• Expansion stage: The stage where the business scales its operations, enters new markets, and expands significantly.
• Maturity stage: The stage where the business reaches stability and focuses on maintaining its position.
• Decline/renewal stage: A phase marked by decreased performance, requiring strategic efforts to revitalize the business.

Strategies for business life cycle stages

Every business starts somewhere. But it’s not where you begin that matters — it’s how you progress through the stages of development to become a success in your industry.

Here’s an overview of the five business life cycle stages, their challenges, and strategies to overcome them.

1. Seed stage/startup stage

At the seed stage , businesses embark on the exciting journey of turning an idea into reality. This initial phase of business development is all about validating the concept, gathering resources, and securing early funding. This stage is also called the startup stage .

To obtain funding, entrepreneurs approach investors or leverage crowdfunding platforms to raise the necessary capital to fuel the business’s growth.

Goals at the seed stage:

• Developing a clear value proposition and defining the target market
• Securing early customers and generating revenue
• Refining the product or service offering based on customer feedback
• Conducting market validation and pilot testing
• Implementing effective marketing and sales strategies

Challenges at the seed stage include:

• Managing limited resources and funding constraints
• Building brand awareness and customer trust
• Navigating regulatory and legal requirements
• Dealing with rapid growth, which can hurt quality without the right team in place

Strategies at the seed stage:

• Build a strong founding team: Assemble a team with complementary skills and expertise to enhance the business’s chances of success (e.g., partnering with a technical co-founder to develop the product while focusing on marketing and sales).
• Establish a network of mentors and advisers: Seek guidance and support from experienced mentors and advisers who can provide valuable insights and help to navigate challenges (e.g., joining an incubator program that offers mentorship and networking opportunities).
• Develop a clear value proposition and define the target market: Clearly articulate the unique value the product or service offers and identify the specific target market it aims to serve (e.g., conducting market research to understand customer needs and preferences and refining the value proposition accordingly).

In this pivotal stage, businesses lay the foundation for future growth and pave the way for the exciting stages that lie ahead.

2. Growth stage

After successfully navigating the seed stage, businesses enter the growth stage — the transition from startup to rapid expansion and development. This stage is about achieving consistent revenue growth, scaling operations, and expanding the customer base.

Goals at the growth stage:

• Invest in marketing and sales to drive customer acquisition
• Optimize operational efficiency and supply chain management
• Expand distribution channels and enter new markets

Challenges at the growth stage include:

• Maintaining quality as production increases
• Managing cash flow to accommodate expanding operations and increased costs
• Attracting and retaining top talent to manage growth
• Navigating increasing regulations and compliance requirements

Strategies at the growth stage:

• Build a strong management team and organizational structure
• Implement scalable systems and processes
• Continuously monitor and adjust growth strategies

Factors influencing growth and expansion include effective marketing and customer acquisition strategies, strong leadership and management capabilities, and access to capital and strategic partnerships.

To sustain growth, businesses focus on:

• Investing in infrastructure and technology
• Expanding distribution channels and entering new markets
• Building a high-performing team and fostering a culture of innovation

By embracing the opportunities and challenges of this stage, businesses set themselves up for continued success and market dominance.

3. Expansion stage

You planted the seed of a business idea and grew it into a fast-growing company. Now it’s time to expand into new markets and grasp opportunities you never could have before. 

During the expansion stage , businesses aim for market dominance and brand building. This may include venturing into other countries and regions to find new customers to sell to.

For example, an ecommerce business may expand its operations into the international market by opening an online store in a new language or country. Or partnering with a warehouse in that country to ship products directly to overseas customers. 

Goals at the expansion stage:

• Diversifying products or service offerings to increase sales
• Scaling production capacity and distribution channels
• Hiring additional talent and building a high-performing team
• Strengthening partnerships and alliances

Challenges at the expansion stage include:

• Increased financial risk: Expanding into new markets carries the risk of greater financial losses due to unanticipated costs and lack of customer demand.
• Loss of focus: With the need to focus on multiple regions, businesses can lose sight of their core mission and risk losing customers in existing markets.
• Growing pains: Companies transitioning from the startup stage to larger operations may experience growing pains, such as difficulty hiring top talent, increased operational complexity, and higher overhead costs.
• Increased complexity and management issues: Expansion requires complex management processes and structures that can be difficult to implement quickly. For example, a small retail business opening multiple new store locations may face challenges in managing inventory, staffing, and customer service across different locations.
• Market saturation and competition: As businesses venture into overseas markets, they may have to compete with established players or face market saturation.
• Regulatory and compliance complexities: Companies must contend with increased regulatory requirements for each new market they enter, as well as different compliance standards in each country.

Strategies at the expansion stage:

• Develop a clear expansion strategy: Create a well-defined strategy outlining specific goals, target markets, and the steps required to enter and establish a presence in new markets (e.g., setting a goal to enter three new international markets within the next two years and outlining the market entry process for each).
• Build strategic partnerships: Form alliances with local businesses or distributors in the target market to leverage their existing networks, local knowledge, and customer base (e.g., partnering with a local distributor in a foreign market to gain access to their established distribution channels and customer relationships).
• Adapt products or services: Customize offerings to meet the specific needs and preferences of the new market (e.g., modifying product packaging and labeling to comply with local regulations and cultural norms).
• Invest in talent acquisition and training: Hire and train talent with expertise in the target market (e.g., recruiting local sales representatives who have a deep understanding of the local market dynamics and customer preferences).

4. Maturity stage

The maturity stage signifies a company’s establishment in the market with a stable customer base. This stage is characterized by intense competition and price pressure, requiring businesses to optimize operations and maximize profitability.

Goals at the maturity stage:

• Profit maximization: Focus on optimizing operations and cost management to maximize profits (e.g., streamlining processes, negotiating favorable supplier contracts, and implementing efficiency measures).
• Market share retention: Maintain and defend the existing market share by continuously delivering value to customers and staying ahead of competitors (e.g., monitoring market trends, conducting competitive analysis, and adapting marketing strategies to meet changing customer preferences).
• Customer retention and loyalty: Build strong relationships with existing customers and enhance customer loyalty to ensure repeat business and positive word-of-mouth referrals (e.g., implementing customer loyalty programs, providing excellent customer service, and offering personalized experiences).
• Product and service innovation: Continuously innovate and improve products or services to meet evolving customer needs and stay relevant in the market (e.g., conducting market research, gathering customer feedback, and investing in research and development).

Challenges at the maturity stage include:

• Market share and differentiation: Companies must strive to retain their market share and differentiate themselves from competitors, especially in a crowded marketplace.
• Changing customer preferences and market trends: Adapting to evolving customer preferences and market trends is crucial to sustain growth and remain relevant.
• Cost-efficiency and innovation fatigue: Balancing cost-efficiency while continually innovating can be a delicate task as businesses attempt to optimize resources.
• Continuous product or service innovation: Constantly exploring new features, functionalities, or improvements to stay ahead of the competition.
• Enhancing customer experience and loyalty programs: Providing exceptional customer service and loyalty programs to cultivate customer loyalty and increase retention.
• Exploring new markets or diversifying offerings: Seeking opportunities in untapped markets or diversifying product/service offerings to expand the customer base.

Strike a balance between maintaining existing operations and exploring new avenues for growth to stay competitive and continue thriving in the marketplace.

5. Decline/renewal stage

Declines happen to even the best companies, but there’s a silver lining for those that remain resilient and make the right business decisions. Apple, Tesla, and Netflix are excellent examples of coming out on top after declining during recessions, demand changes, and major competition. 

Here’s a look at the goals, challenges, and strategies businesses can use at each stage.

Decline stage

This is when a company experiences a downturn in performance and requires strategic efforts to revive its operations and get back on track.

Goals at the decline stage:

• Recognize signs of decline in the business
• Understand the reasons for decline and the challenges faced
• Develop transition strategies or exit plans

Challenges at the decline stage include:

• Declining sales and market share
• Obsolete products or services
• Increasing competition or disruptive technologies

Strategies at the decline stage:

• Restructure operations and implement cost-cutting measures
• Seek strategic partnerships or acquisitions
• Consider business closure or divestment options

Renewal stage

This is when a company implements strategic efforts to bounce back from a decline, rejuvenate its operations, and regain momentum for future success.

Goals at the renewal stage:

• Identify opportunities for revitalization and reinvention
• Address challenges and reposition in the market
• Focus on growth and sustainability

Opportunities at the renewal stage include:

• Introduce new products or services
• Adopt emerging technologies or business models
• Enhance brand image and customer engagement

Strategies at the renewal stage:

• Conduct a comprehensive business review and analysis
• Develop a strategic plan for transformation
• Implement change management and innovation initiatives

Successfully navigating the growth stages of a business requires strategic thinking, agility, and resilience. By taking proactive steps to identify opportunities for growth, diversifying offerings, and innovating services or products, businesses can remain competitive in an ever-changing market, increasing their chances of success. 

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The 7 Stages of Starting and Running a Business

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The Seed Stage

The start-up stage, the growth stage, the established stage, the expansion stage, the decline stage, the exit stage, frequently asked questions.

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A small business goes through various stages of development. Your challenges will change and require different approaches to be successful. You need to be able to anticipate upcoming challenges and have strategies to succeed at each stage of the business lifecycle.

Key Takeaways

• Start with one idea while working to establish a customer base and market presence
• Focus on expanding and growing your business even after it becomes profitable
• Work with valuation experts and tax professionals if you're planning on exiting your business

The seed stage of your business lifecycle is when your business is just a thought or an idea. Most seed-stage companies will have to overcome the challenge of market acceptance and pursue one opportunity. Don't try to take on too much at once.

At this stage of the business the focus your focus should be on making sure your idea works well with your skills, experience, and passions. You'll also need to decide on a business ownership structure, come up with a business plan, and get funding.

You might be able to self-fund your business, get investments from friends and family, or apply for government grants. If you have some sort of existing client base for your business already, you may be able to get them to invest.

Once your business legally exists, you'll need to make sure you can provide whatever products or services you're planning on selling, and establish a customer base and market presence. You might need to change your business strategy or raise more cash if your expenses are higher than anticipated.

Try not to burn through your cash too quickly. It may take longer than you anticipate for your business to become profitable or break even.

If your business is growing, that means that your revenue and customer base are also likely growing. You might need to hire and train new employees to handle with the additional workload that comes with a growing business.

You may also need to invest additional money in the company to maintain your success. If you don't have enough cash available, you might be able to take out a loan through the Small Business Administration.

It's still a lot of work to maintain your business once it's become self-sustaining or even profitable. Make sure you're maintaining or growing your revenue stream by keeping up with any new developments in the industry or changing customer preferences.

If your original business is doing reasonably well, or if it can't grow anymore without a new customer base, it may be time for the business to expand into a new market. In some cases it may be easier for you to expand into a small, niche market, because a larger market is likely to be more competitive and may take longer to break into.

Make sure you do plenty of planning and research before deciding where to invest your resources. You may want to focus on markets that are related to your existing business.

In the decline stage, sales, profit, and cash flow all decline. A business owner might be forced to sell or close their business if they cannot sufficiently cut costs or increase their profits. A business might be able to avoid declining by reinventing itself, or branching out into new markets or technologies. That way, it can reposition itself and begin new growth in the marketplace.

There are a few ways you might leave a business that you started. You might be able to sell your business and start a new venture, the business might not have worked out, or you might be ready to completely retire from work.

Can You Sell Your Business?

Even though it might have taken years of hard work to build the company, you'll need to consider its real value in the current marketplace. A qualified valuation expert can help you figure out the fair market value of your business and may be able to help you come up with a strategy to help you increase the profitability of your company before you sell.

Closing Your Business

In some situations, you may need to close rather than sell your business. If you have any partners, you'll need a written agreement when closing the business. If you have an LLC or a corporation, you need to legally dissolve it.

You'll need to cancel any registrations, permits, licenses, and business names as well as your Employer Identification Number. Make sure you notify federal and state tax agencies that you are closing your business.

Make sure all your financial obligations have been met. Pay any employees you might have, and handle final returns of income tax and sales tax. You'll need to maintain business documents after the business has closed, including tax and employment records.

You'll need to keep tax and employment records after your business has closed. You'll typically need to hold onto these records for three to seven years.

If you can, you'll also want to consult with a tax expert or financial advisor while closing out your business. That way you can make sure you're meeting all of the necessary requirements.

What Is the Stage After Start-Up?

The stage after the start-up stage is the growth stage. You'll need to make sure your business begins to grow a revenue and customer base.

How Do I Start My Own Business From Scratch?

You'll need to do market research to find out if your idea has the potential to be profitable. You'll also need to write a business plan and figure out how to get funding for your business, whether it's through investors, loans, or self-funding.

U.S. Small Business Administration. " Loans ."

CFI. " Business Life Cycle ."

U.S. Small Business Administration. " Close or Sell Your Business ."

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Startup Terms Glossary

• Safe Harbor
• Search Fund
• Secured Debt
• Security Interest
• Seed Capital
• Senior Debt
• Series A Preferred Stock
• Series A Round
• Series B Round
• Series Seed Financing
• Single Trigger Acceleration
• Small Business Investment Company
• Staggered Board
• Stock Options
• Stockholders

What is Seed Stage?

When a startup has a new idea to create a company, it is necessary for them to pursue getting funding to make their ideas a reality. During the seed stage, entrepreneurs seek out investment in their company to acquire the funding needed to create it. This funding can come from friends, family member, business contacts, or private investors.

Seed Stage Examples

Examples of seed stage:

• Example 1. Noel has an idea to create a new type of pen that helps children learn how to write faster. In order to further develop his idea, he needs funding to work with a manufacturer who can bring his idea to live. Noel approaches his friends and family to ask for their investment in his business idea. This stage of his company is called the seed stage.

Here’s another web page about the seed stage.

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I am licensed in both Texas and Arkansas but actively working in Arkansas. My primary focus is criminal defense, family law, and estate planning (wills and trusts).

I represent startups, investment firms, and individuals frequently with equity and debt financing, M&A transactions, and commercial contracts.

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How to Start a Seed Business: Key Insights

Main Sections In This Post Steps To Starting A Seed Business Points to Consider Knowledge Is Power Featured Video

This post offers a comprehensive guide to kickstart your seed business, with practical examples and access to valuable resources.

It serves as a valuable reference for both startup and established businesses.

Feel free to share and bookmark for future reference as you embark on your seed business journey.

Let’s get started with the steps.

The Steps to Take To Start Your Seed Business

Below are the steps to starting a seed business.

Each step is linked to a specific section, allowing you to jump to your desired section or scroll to follow the steps in order.

• An Overview of What You’re Getting Into
• Seed Business Overview
• Researching Your Seed Business
• Looking at Financials
• Creating Your Mission Statement
• Creating A Unique Selling Proposition (USP)
• Choose a Seed Business Name
• Register Your Company
• Create Your Corporate Identity
• Writing a Business Plan
• Banking Considerations
• Getting the Funds for Your Operation
• Software Setup
• Business Insurance Considerations
• Supplier and Service Provider Considerations
• Setting Your Prices
• Physical Setup
• Creating a Website
• Create an External Support Team
• Hiring Employees
• Getting Customers Through the Door

1. An Overview of What You’re Getting Into

Passion is indeed the driving force behind entrepreneurial success, especially in a field like seed business. When you’re genuinely passionate about what you do, it becomes more than just a job; it’s a labor of love.

This passion can fuel your determination to overcome challenges, innovate, and provide exceptional value to your customers.

The hypothetical scenario of pursuing your seed business even without financial worries is a powerful litmus test.

If you would still choose to embark on this journey, it demonstrates an unwavering commitment and deep-rooted passion for your venture. It signifies that you’re not solely driven by monetary gains but by a genuine desire to make a meaningful impact in the seed industry.

Passion not only keeps you motivated but also inspires others around you, be it your team, customers, or partners. It’s the intangible element that sets your business apart, making it more than just a transactional entity.

It becomes a source of inspiration, innovation, and positive change.

In essence, passion is the heart and soul of your seed business, propelling you forward, helping you navigate challenges, and ultimately contributing to your long-term success.

For More, See How Passion Affects Your Business . Also, see Considerations Before You Start Your Business to identify key points for a new business owner.

2. Gaining an Overview of Owning a Seed Business

Next, let’s spend some time on key issues to give you an overview of what to expect from owning and running your business.

a.) A Quick Overview of Owning a Seed Business

A seed business is an enterprise focused on the cultivation, production, and distribution of seeds used in agriculture, horticulture, gardening, and landscaping .

These businesses play a pivotal role in the food supply chain, environmental conservation, and supporting the growth of healthy plants.

Day-to-day tasks in running and managing a seed business involve a combination of operational, administrative, and customer-focused activities:

• Seed Sourcing: Procuring high-quality seeds from reliable suppliers or breeding new varieties in-house if the business operates as a seed producer.
• Inventory Management: Ensuring an adequate stock of various seed types, managing inventory levels, and monitoring seed quality and viability.
• Sales and Customer Service: Interacting with customers, addressing inquiries, and providing product recommendations based on customer needs. This may include both online and in-person sales efforts.
• Seed Packaging: Properly packaging seeds for sale, labeling them with essential information like plant type, variety, planting instructions, and expiration dates.
• Order Fulfillment: Processing customer orders, packaging seeds, and arranging for their delivery or shipment. Managing the shipping and handling process efficiently.
• Quality Control: Regularly testing seed batches for germination rates, purity, and disease resistance. Ensuring that only high-quality seeds are sold to customers.
• Marketing and Promotion: Developing marketing strategies, creating promotional materials, and maintaining an online presence through a website or social media to attract and engage customers.
• Financial Management: Handling financial transactions, monitoring expenses, tracking revenue, and managing cash flow effectively to sustain the business.
• Gardening and Plant Care: For businesses with on-site growing operations, daily tasks may involve tending to plants, ensuring proper growing conditions, and maintaining a healthy crop.
• Research and Development: For seed breeders, conduct research to develop new seed varieties, improve existing ones, and stay updated with industry trends and advancements.
• Compliance and Regulations: Staying informed about seed industry regulations and compliance requirements, ensuring that all business practices adhere to legal standards.
• Networking: Building relationships with seed suppliers, distributors, retailers, and industry associations. Attending trade shows and conferences to stay connected with the seed community.
• Record Keeping: Maintaining accurate records of inventory, sales, customer information, financial transactions, and any breeding or research activities.

Running a seed business requires a balance of horticultural knowledge, customer service skills, marketing acumen, and attention to detail.

The goal is to provide customers with high-quality seeds and expert guidance to support their gardening and farming endeavors while maintaining a profitable and sustainable operation.

b.) Seed Business Models

Seed businesses can take on various setups and business models, each with its unique characteristics and strategies.

Here are some common types:

• Online Seed Retailer: An e-commerce model where seeds are sold exclusively online. This setup provides a broad customer reach and allows for easy expansion into different regions.
• Brick-and-Mortar Store: A physical store specializing in selling seeds and gardening supplies. This model offers face-to-face customer interactions and the opportunity to provide personalized recommendations.
• Nursery or Garden Center: These businesses often grow and sell their seeds and plants. They can attract local customers seeking a wide range of gardening products.
• Subscription Box Service: This model delivers curated seed selections or gardening supplies to subscribers regularly. Subscribers receive a convenient and surprise package of seeds, fostering customer loyalty.
• Seed Producer or Breeder: Focused on developing and producing new seed varieties, this setup may sell seeds directly to retailers or through distribution channels.
• Community Seed Bank: A nonprofit model focused on preserving and sharing heirloom and rare seeds. These organizations play a vital role in seed conservation and community engagement.
• Wholesale Seed Supplier: Businesses that sell seeds in bulk to retailers, garden centers, or other businesses. This model often requires relationships with seed producers.
• Cooperative Seed Exchange: A community-driven model where members share and exchange seeds among themselves. Members may meet periodically to trade seeds and gardening knowledge.
• Greenhouse Operation: Greenhouses can grow and sell a variety of seeds and plants year-round. This model allows for extended growing seasons and diverse product offerings.
• Online Marketplace: An online platform that connects seed producers, suppliers, and customers. This model offers a wide range of seed options but may involve competition with numerous sellers.

Choosing the right business model from the beginning is crucial, as switching your model later is more challenging. Identifying a profitable and high-demand niche for your seed business is essential.

Conduct thorough market research to understand your target audience, competition, and the unique value your business can provide.

By aligning your chosen model with market demands and customer preferences, you can increase your chances of success in the seed industry.

c.) Making Your Seed Business Stand Out

• Unique Seed Varieties: Offer a diverse selection of unique, heirloom, or rare seed varieties that are not readily available in mainstream markets. This can attract avid gardeners and collectors looking for something special.
• Educational Content: Provide customers with informative content on seed planting, cultivation, and gardening tips. Hosting webinars, and workshops, or publishing how-to guides can position your business as a valuable resource.
• Custom Seed Blends: Create custom seed blends tailored to specific customer needs, such as regional climate or garden themes. Personalized seed packages can set your business apart.
• Organic and Non-GMO: Emphasize the use of organic and non-genetically modified (non-GMO) seeds, catering to health-conscious and environmentally aware customers.
• Seed Subscription Boxes: Offer subscription boxes that deliver a curated selection of seeds seasonally or monthly, providing customers with a convenient way to explore new varieties.
• Collaborations: Partner with local or regional gardening experts, nurseries, or environmental organizations for joint promotions or exclusive seed offerings.
• Seed Saving Initiatives: Encourage seed saving practices among customers by providing information, workshops, or incentives for returning saved seeds, fostering sustainability and customer loyalty.
• Online Community: Create an online community or forum where customers can share gardening experiences, ask questions, and connect with fellow enthusiasts. Building a community around your brand can foster customer engagement.
• Seed Starter Kits: Offer comprehensive seed starter kits that include seeds, soil, pots, and instructions, making it easier for beginners to get started with gardening.
• Themed Collections: Curate seed collections based on themes like “culinary herbs,” “pollinator-friendly,” or “medicinal plants,” catering to specific interests and needs.
• Seed Trials: Conduct seed trials and share the results with customers, showcasing your commitment to quality and product testing.
• Sustainable Packaging: Use eco-friendly packaging materials that align with environmentally conscious customers’ values, reducing waste and environmental impact.
• Customer Reviews and Testimonials: Encourage satisfied customers to leave reviews and testimonials on your website or social media platforms to build trust and credibility.
• Participation in Gardening Events: Attend or sponsor gardening events, expos, or local farmers’ markets to engage with potential customers and showcase your seed offerings.
• Exceptional Customer Service: Provide exceptional customer service, including prompt responses to inquiries, assistance with gardening challenges, and a hassle-free return policy.

d.) Add-ons for a Seed Business

• Gardening Tools: Offer a selection of high-quality gardening tools, such as trowels, pruners, and soil testers, to complement your seed offerings.
• Soil Amendments: Provide organic soil amendments, compost, fertilizers, and mulch to help customers optimize their gardening experience.
• Seedling Starter Kits: Offer kits that include seedling trays, grow lights, and heat mats for customers looking to start seeds indoors.
• Live Plants: Expand your product range to include live plants, seedlings, or potted herbs, providing customers with ready-to-plant options.
• Gardening Books and Guides: Stock a variety of gardening books, guides, and reference materials to assist customers in their gardening endeavors.
• Seasonal Decor: Offer seasonal garden decor, ornaments, or garden art to enhance the aesthetics of outdoor spaces.
• Garden Pest Control: Provide organic pest control solutions, such as neem oil or beneficial insects, to help customers protect their gardens.
• Propagation Supplies: Sell propagation supplies like rooting hormones, seedling heat mats, and humidity domes for customers interested in plant propagation.
• Garden Apparel: Offer branded garden apparel, including gardening gloves, hats, and aprons, allowing customers to showcase their passion.
• Plant Markers and Labels: Provide a range of plant markers, labels, and signage to help customers organize and identify their garden plants.
• Workshops and Classes: Host workshops and classes on various gardening topics, charging a fee for participation.
• Garden Decor: Include garden decor items like birdhouses, wind chimes, and garden sculptures to add charm to outdoor spaces.
• Custom Seed Packets: Offer personalized seed packets for special occasions like weddings, parties, or corporate events, serving as unique party favors.
• Bulk Seed Packaging: Allow customers to purchase seeds in bulk for larger-scale gardening projects or community gardens.
• Online Garden Planner: Develop or partner with an online garden planner tool that helps customers design and plan their garden layouts.

By implementing these ideas, a seed business can not only stand out in a competitive market but also provide valuable add-ons that enhance the overall gardening experience for customers.

e.) Pros and Cons of Owning a Seed Business

Starting and running a business comes with its share of pros and cons. While the benefits can be rewarding, it’s equally crucial to be aware of the potential challenges.

Understanding these challenges allows for better preparation and minimizes surprises along the way, ensuring a more informed and resilient approach to business ownership.

For more, see Pros and Cons of Starting a Small Business.

f.) Challenges You Could Face When Starting and Operating a Seed Business

Challenges When Starting a Seed Business:

Starting a seed business presents several challenges that aspiring entrepreneurs should be prepared to address:

• Market Research: Conducting thorough market research to understand customer preferences, competition, and demand for specific seeds can be time-consuming and complex.
• Regulations: Navigating the regulatory landscape, including seed quality standards and labeling requirements, can be intricate and vary by region.
• Seed Sourcing: Finding reliable and high-quality seed suppliers or establishing your own seed production can be a significant challenge.
• Initial Capital: Acquiring the necessary funding for startup costs, such as inventory, equipment, and marketing, can be a barrier for some entrepreneurs.
• Skillset: Developing the expertise in seed cultivation, plant genetics, and horticulture required for successful seed production and sales can be a steep learning curve.
• Brand Recognition: Building brand recognition and trust among customers takes time and effective marketing strategies.

Challenges When Operating a Seed Business:

Once the seed business is operational, new challenges arise:

• Competition: Maintaining a competitive edge in a crowded market requires ongoing innovation, quality control, and customer satisfaction.
• Inventory Management: Balancing seed inventory to meet customer demand without overstocking or running out of popular varieties is an ongoing challenge.
• Seasonal Variations: Dealing with seasonal fluctuations in demand and adjusting production accordingly can be complex.
• Pests and Diseases: Managing potential threats to seed crops, such as pests, diseases, and adverse weather conditions, is crucial for consistent quality.
• Regulatory Compliance: Staying up-to-date with evolving regulations, certifications, and labeling requirements to ensure compliance is essential.
• Customer Retention: Continuously engaging with and retaining customers through effective customer service and marketing strategies is vital for long-term success.
• Technology Integration: Adapting to advancements in technology for efficient seed processing, packaging, and online sales platforms can be challenging.
• Scaling: Expanding the business while maintaining quality control and customer service can present operational challenges.
• Supply Chain Management: Managing a complex supply chain, including suppliers and distribution channels, is essential for consistent seed availability.
• Financial Sustainability: Ensuring consistent cash flow and profitability to cover operational costs and reinvest in the business is an ongoing concern.
• Environmental Sustainability: Addressing environmental concerns and sustainable farming practices is becoming increasingly important in the seed industry.

Despite these challenges, a well-researched and adaptable approach, along with a commitment to quality and customer satisfaction, can help seed businesses thrive in the long run.

g.) Questions You Need to Consider for Your Seed Business

Before embarking on your seed business venture, it’s crucial to address key questions and considerations:

• Business Model: Define your seed business model. Determine whether you aim to sell seeds directly to consumers, supply wholesalers, or specialize in a niche aspect of the seed industry.
• Skillset: Assess your skills and knowledge related to seed cultivation, business management, and industry-specific expertise. Identify areas where you may need additional training or expertise.
• Solo or Team: Decide whether you will operate the business independently or hire employees. Evaluate the workload and responsibilities required for smooth business operations.
• Management: Determine whether you plan to manage the business personally or hire a manager to oversee day-to-day operations.
• Customer Acquisition: Develop strategies for attracting and retaining customers. Consider marketing, branding, and customer service approaches to build a loyal clientele.
• Partnerships: Explore potential partnerships or investors who can contribute to your business growth and provide financial support.
• Financing: Plan how you will secure funding for startup costs. Consider loans, personal savings, investors, or grants as potential sources of capital.
• Profitability Timeline: Estimate the time it will take for your business to become profitable. Account for initial expenses and ongoing operational costs.
• Financial Support: Identify how you will sustain yourself during the challenging early stages of the business when profitability may be limited.
• Product and Services: Define your product and service offerings. Ensure they align with market demand and customer preferences.
• Market Demand: Conduct thorough market research to confirm that there is demand for your products and services. Identify your target audience and their needs.
• Unique Selling Proposition: Determine what sets your seed business apart from competitors. Highlight your unique value proposition to attract customers.

By addressing these fundamental questions and considerations, you’ll be better equipped to navigate the challenges and opportunities within the seed industry and establish a successful business strategy.

3. Research

Inside information seed business research.

Prior to launching your seed business, extensive research is imperative. Quality information equips you with insights to navigate the endeavor effectively.

Seek advice from experienced individuals in the seed business; their knowledge is invaluable.

Engaging with them offers a chance to tap into their years of expertise.

To identify the right individuals to consult, explore various strategies detailed in the article “An Inside Look Into the Business You Want To Start.”

These methods will help you connect with experienced professionals and gather the essential insights required to make informed decisions.

Incorporating their wisdom into your business strategy can significantly enhance your prospects for success.

Understanding the nuances of the seed industry through consultation with experts ensures you are well-prepared and informed, mitigating unexpected challenges down the road.

See An Inside Look Into the Business You Want To Start for all the details.

Supply, Demand, and Your Location

Determining market demand for your seed business in your chosen location is critical for success.

Here are simple strategies to assess demand effectively:

• Market Research: Conduct thorough market research to understand customer preferences and needs. Analyze existing data, surveys, and industry reports to gauge demand trends.
• Competitor Analysis: Study your competitors in the chosen location. Identify gaps in their offerings and areas where you can differentiate your business to meet unmet needs.
• Online Tools: Utilize online tools and resources. Google Trends, keyword research tools, and social media analytics can provide insights into what people are searching for and discussing related to seeds in your area.
• Local Networking: Connect with local gardening clubs, farmers’ markets, and horticultural societies. Attend events and engage in conversations to gather valuable insights from potential customers.
• Test Marketing: Consider running a pilot campaign or soft launch to test the market’s response. Offer a limited range of products and gather feedback from early customers.
• Customer Surveys: Conduct surveys or interviews with target customers to understand their preferences, buying habits, and pain points related to seed products.
• Demand Forecasting: Analyze historical data if available. Look for seasonal patterns and trends to anticipate peak demand periods.
• Location Scouting: If planning a physical store, scout locations with high foot traffic and proximity to potential customers. Analyze the demographics and buying behaviors of the local population.
• Online Presence: For online businesses, invest in search engine optimization (SEO) and pay-per-click (PPC) advertising to drive targeted traffic. Monitor website analytics to track user behavior and preferences.
• Feedback Loop: Continuously gather feedback from customers. Encourage reviews and ratings to understand their satisfaction levels and areas for improvement.
• Partnerships: Collaborate with local garden centers, agricultural supply stores, or online platforms to expand your reach and assess demand through joint ventures or affiliate marketing.
• Adaptability: Be prepared to adapt based on market feedback. Adjust your product offerings, pricing, or marketing strategies as needed to meet changing demand.

By employing these strategies, you can gain valuable insights into the demand for your seed business in your chosen location.

This informed approach will help you make decisions that align with market needs and increase your chances of a successful venture.

For more, see the Demand for Your Products and Services and Choosing The Best Location for Your Business.

Target Audience

Understanding your target audience provides several benefits:

• Tailored Offerings: It allows you to customize products and services to meet their specific needs.
• Effective Marketing: You can create targeted marketing campaigns that resonate with your audience.
• Improved Customer Relationships: Understanding their preferences fosters stronger customer relationships.
• Enhanced Profitability: Focusing on what your audience wants can boost sales and profitability.

Target Market Ideas for a Seed Business:

• Home Gardeners
• Small-scale Farmers
• Organic Farming Enthusiasts
• Horticulture Professionals
• Community Gardens
• Environmentalists
• Sustainable Agriculture Advocates
• Educational Institutions with Agriculture Programs
• Landscape Designers and Architects
• Local Farmers’ Markets and Co-ops

For more, see How To Understand Your Target Market.

4. Looking at Financials:

In launching a seed business, careful consideration of startup costs, monthly expenses, and revenue generation is paramount for success.

Startup Costs:

Accurate estimation of startup expenses is crucial. Underestimating can lead to financial constraints that hinder your business’s launch while overestimating can deter potential investors or lenders.

Costs are influenced by factors such as the business’s size, location, hiring decisions, equipment purchases, and leasing arrangements.

To estimate costs, create a comprehensive list of needs and gather price quotes. The research will uncover additional expenses you might not initially foresee.

For more detailed information, refer to my article on Estimating Startup Costs.

Sales and Profit:

Sales and profit are contingent on various factors:

• Customer Service: Exceptional service enhances customer loyalty and word-of-mouth recommendations.
• Product/Service Popularity: The appeal and quality of your offerings significantly affect sales.
• Demand: Identify and target markets with genuine demand for your products and services.
• Marketing: Effective marketing strategies can expand your customer base.

Profitability is determined by the profit per sale, the number of sales, and monthly overhead expenses.

To evaluate your seed business’s profitability, consider how these elements interplay.

For instance, generating a $300 profit per sale is insufficient if you only secure one sale per month. Conversely, high-volume sales may compensate for lower profit margins if expenses are managed efficiently.

To achieve a holistic understanding of your business’s financial viability, assess your ability to maintain a balance between profit per sale, sales volume, and overhead expenses.

This knowledge will empower you to make informed decisions that contribute to your seed business’s long-term success.

For More, See Estimating Profitability and Revenue.

Simple Sample: Financial Lists to Consider As a Starting Point

Note: Focus on the list items more than the numbers. The numbers are samples. Your estimates will differ due to how you set up your business, location, expenses, and revenues.

Sample Estimated Startup Costs for a Seed Business (USA):

• Business Registration and Licensing: $500 – $1,500
• Legal and Professional Fees: $1,000 – $3,000
• Seed Inventory: $5,000 – $15,000
• Greenhouse/Storage Space: $10,000 – $30,000
• Marketing and Branding: $2,000 – $5,000
• Website Development: $1,500 – $5,000
• Packaging Materials: $1,000 – $3,000
• Equipment (e.g., seed sorter, scale): $2,000 – $7,000
• Office Supplies and Software: $1,000 – $3,000
• Insurance (General Liability, Property): $1,500 – $5,000
• Permits and Licenses: $500 – $2,000
• Initial Marketing Budget: $2,000 – $5,000
• Working Capital Reserve: $5,000 – $10,000
• Contingency Fund: $3,000 – $6,000

Total Estimated Startup Costs (Lower): $35,500 Total Estimated Startup Costs (Upper): $95,500

Sample Estimated Monthly Expenses for a Seed Business (USA):

• Rent/Lease (Facility): $1,500 – $4,500
• Utilities (Water, Electricity): $200 – $600
• Employee Salaries (if applicable): $3,000 – $8,000
• Insurance (Liability, Workers’ Comp): $250 – $750
• Marketing and Advertising: $500 – $2,000
• Office Supplies and Software: $200 – $600
• Equipment Maintenance: $100 – $300
• Loan Payments: Variable based on financing
• Packaging Materials: $300 – $1,000
• Website Hosting and Maintenance: $50 – $150

Total Estimated Monthly Expenses (Lower): $5,900 Total Estimated Monthly Expenses (Upper): $17,350

Sample Examples of Profit per Sale (Seeds):

• Packet of Vegetable Seeds: $2.00 – $4.00 (Cost: $0.50 – $1.00)
• Rare Flower Seeds: $5.00 – $10.00 (Cost: $1.50 – $3.00)
• Bulk Crop Seeds (per pound): $10.00 – $20.00 (Cost: $3.00 – $6.00)
• Custom Seed Blends: $8.00 – $15.00 (Cost: $2.50 – $5.00)
• Organic Heirloom Seeds: $3.00 – $6.00 (Cost: $1.00 – $2.50)

Profit margins can vary based on seed type, market demand, and competitive pricing strategies.

Consider revisiting Step 3. Researching your seed business , where there is a technique to get inside information, will benefit you in this step.

5. Create Your Mission Statement

A mission statement serves as the compass for your seed business, clarifying its purpose and guiding principles.

It reminds you of the core benefit your business aims to provide to customers and the community, ensuring you stay on track and maintain a clear focus.

Examples of Mission Statements for a Seed Business:

• “To empower growers with quality seeds and sustainable practices, nurturing bountiful harvests and a greener future.”
• “Our mission is to cultivate a world where every seed planted blooms into a thriving, sustainable ecosystem.”
• “Dedicated to preserving biodiversity and promoting organic farming, we provide seeds that nurture both the earth and its stewards.”
• “At the heart of our mission is the commitment to supply farmers and gardeners with seeds that lead to healthier, more resilient crops.”
• “We exist to champion self-sufficiency, offering seeds that foster sustainable agriculture and nourish communities worldwide.”
• “Our mission is to foster a love for gardening by delivering premium seeds and expert guidance for growers of all levels.”
• “Committed to fostering local resilience, our mission is to provide regionally adapted seeds that thrive in your unique environment.”

These mission statements reflect the core values and goals of a seed business, emphasizing sustainability, quality, community, and customer empowerment.

For more, see How To Create a Mission Statement.

6. Creating A Unique Selling Proposition (USP)

A Unique Selling Proposition (USP) is a powerful tool for distinguishing your seed business in a crowded market.

It helps identify and create something unique and special that sets your business apart from competitors.

A compelling USP not only attracts customers but also builds brand loyalty.

Examples of a USP for a Seed Business:

• Rare and Exotic Varieties: Offering a wide selection of rare and exotic seed varieties not easily found elsewhere.
• Organic and Sustainable Practices: Emphasizing environmentally friendly and sustainable seed production methods.
• Expert Guidance: Providing expert advice and resources to help customers select the right seeds and grow successful crops.
• Customized Seed Blends: Offering customized seed blends tailored to specific customer needs or regional conditions.
• Seed Quality Assurance: Guaranteeing the highest seed quality through rigorous testing and quality control processes.
• Local Sourcing: Promoting locally sourced and regionally adapted seeds, supporting local agriculture.
• Educational Workshops: Hosting workshops and educational events to empower customers with seed planting and growing knowledge.
• Seed Saving Initiatives: Supporting seed-saving efforts and heirloom varieties, preserving agricultural biodiversity.
• Guaranteed Germination: Providing a germination guarantee to boost customer confidence.
• Subscription Services: Offering seed subscription boxes with curated selections and gardening resources.

A well-crafted USP not only attracts customers but also establishes a strong brand identity, driving growth and loyalty in the competitive seed business landscape.

7. Choose a Business Name

Selecting the right business name is crucial, as it defines your brand identity. Consider these tips when choosing a name for your seed business:

Catchy and Relevant: Opt for a name that resonates with the seed industry and is memorable to your customers.

Pronounceable: Choose a name that’s easy to say and spell, aiding word-of-mouth referrals.

Longevity: Business names endure, so take your time to make the right choice.

Domain Availability: Ensure the name is available as a domain for your online presence.

Trademark Check: Verify that your desired name isn’t already registered by another business to prevent legal issues.

30 Ideas for Seed Business Names:

• SeedScape Pro
• GrowGenius Seeds
• PureHarvest Seeds
• GreenThumb Genetics
• SeedWave Solutions
• EcoSprout Creations
• TerraSeed Innovations
• CropCrafted Genetics
• SeedSource Direct
• AgriBloom Ventures
• OrganicSeed Haven
• NatureNurtured Seeds
• VitalGrowth Genetics
• SeedSync Studios
• EarthBounty Seeds
• ProSeed Pathways
• BioBloom Genetics
• HarvestHub Seeds
• SeedSelect Provisions
• PureRoot Seedlings
• CultivaGrow Labs
• SeedVista Ventures
• GreenHarvest Genetics
• TerraBloom Genetics
• SeedSmart Solutions
• GrowMasters Genetics
• EcoCrop Creations
• EarthlySeed Innovations
• SeedScience Labs
• VitalHarvest Genetics

Use these ideas as inspiration, combining words, concepts, or your unique spin to craft a memorable and relevant name for your seed business.

For more, see the following articles:

• How To Register a Business Name
• Registering a Domain Name For Your Business

8. Register Your Company

Ensuring the legal compliance of your seed business is paramount.

Consult with a professional to navigate the legal landscape, determine the most tax-efficient structure, and minimize liability risks.

Common Registrations for a Seed Business:

• Business Structure Registration:  Establish your business as a legal entity, such as an LLC or corporation.
• Employer Identification Number (EIN):  Obtain this from the IRS for tax purposes.
• State Business Registration:  Register with the state to operate legally within its jurisdiction.
• Sales Tax Permit:  If applicable, secure a permit to collect and remit sales taxes on seed sales.

Permits and Licenses for a Seed Business:

• Agricultural Licenses:  Depending on your location, these licenses may be necessary for seed production.
• Seed Labeling and Packaging Approval:  Ensures compliance with seed quality and labeling standards.
• Import/Export Licenses:  Required for international seed trade.
• Environmental Permits:  For seed farms, addressing water usage, land management, and potential environmental impacts.
• Transportation Permits:  If involved in seed distribution, secure necessary transportation permits.
• Local Business Permits:  Check local regulations for additional permits, like zoning or health permits.

Compliance with these registrations, permits, and licenses is essential for the lawful operation of your seed business and for maintaining a positive legal standing.

Registration:

• How to Register Your Business
• How To Register a DBA
• How to Register a Trademark
• How to Get a Business License

Business Structures:

• How to Choose a Business Structure
• Pros & Cons of a Sole Proprietorship
• How To Form an LLC
• How To Register a Business Partnership
• How To Form a Corporation
• How To Choose a Business Registration Service

9. Create Your Corporate Identity

A Corporate ID is a visual representation of your business, encompassing elements like your logo, business cards, website, signage, stationary, and promotional materials.

Maintaining a consistent, professional design across these components is essential to leave a lasting impression on both new and existing customers, enhancing your brand’s credibility and recognition.

You can see our page for an overview of your logo , business cards , website , and business sign , or see A Complete Introduction to Corporate Identity Packages.

10. Writing a Business Plan

A Business Plan Is Essential:

• Crucial for financing and attracting investors.
• Guides startup and ongoing operations.

It Takes Time and Effort:

• Involves creating a vision of your fully operational business.
• Requires careful planning and articulation.
• Yields a clear operational roadmap.

Options Are Available:

• Create from scratch, hire a professional, use templates, or employ software.
• Active participation is essential in any approach.

Expect Changes:

• Business plans and operations may evolve with experience or market shifts.
• Periodic reviews and updates maintain alignment with current goals.
• Adaptability and flexibility are key to long-term success.

Business Plan Template for a Seed Business

1. Executive Summary:

• Business Name and Description
• Vision and Mission Statement
• Business Goals and Objectives
• Summary of Financial Projections

2. Company Description:

• Business Background and History
• Legal Structure (e.g., LLC, Corporation)
• Ownership Structure (if applicable)
• Location and Facilities
• Business History (if existing)

3. Market Research and Analysis:

• Industry Overview and Trends
• Target Market Description
• Customer Profiles and Segmentation
• Competitor Analysis
• SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

4. Product and Service Line:

• Description of Seed Products
• Unique Selling Proposition (USP)
• Quality Assurance and Sustainability Practices
• Pricing Strategy

5. Marketing and Sales Strategy:

• Marketing Plan
• Branding and Positioning
• Sales Channels (Online, Retail, Wholesale)
• Customer Acquisition and Retention
• Marketing Budget

6. Management and Team:

• Owner/Founder Profiles
• Management Team
• Advisory Board (if applicable)
• Roles and Responsibilities
• Organizational Structure

7. Funding Requirements:

• Initial Startup Costs
• Operating Expenses
• Working Capital Needs
• Funding Sources (Investment, Loans, Grants)

8. Financial Projections:

• Projected Income Statement
• Cash Flow Forecast
• Balance Sheet
• Break-Even Analysis
• Financial Assumptions

9. Risk Assessment and Mitigation:

• Identification of Key Risks
• Risk Management Strategies
• Contingency Plans

10. Implementation Timeline:

• Phases of Business Launch
• Milestones and Deadlines
• Responsible Parties

11. Exit Strategy:

• Exit Options (e.g., Sale, Merger, Succession)
• Timing and Criteria for Exit

12. Appendices:

• Supporting Documents (Resumes, Market Research Data, Legal Agreements)
• Additional Information Relevant to the Business Plan
• Provide detailed financial projections, including monthly or quarterly estimates for the first year.
• Include market research findings to justify market demand for your seed products.
• Highlight your competitive advantages, such as seed quality, eco-friendly practices, or unique varieties.
• Clearly outline your marketing and sales strategy, emphasizing how you’ll reach and engage your target audience.
• Showcase the qualifications and experience of your management team.
• Specify the amount of funding required and how it will be allocated.
• Address potential risks and how you plan to mitigate them.
• Present a clear implementation timeline to demonstrate your readiness to launch.
• Include any relevant licenses, permits, or certifications required for seed production and sales.
• Keep the document professional, well-organized, and free from grammatical errors or typos.

Customize this template to suit your specific seed business, ensuring that each section reflects your unique venture and goals.

See How to Write a Business Plan for information on creating your business plan.

11. Banking Considerations

Select a local bank with a small business focus for your seed business.

A dedicated business account keeps personal and business transactions separate, simplifying expense tracking and tax preparation.

Building a rapport with your banker offers access to financial advice and services, streamlining processes.

Ensure you have a merchant account or online service to accept card payments, enhancing sales and customer convenience.

For more, see How to Open a Business Bank Account. You may also want to look at What Is a Merchant Account and How to Get One.

12. Getting the Funds for Your Operation

When seeking a loan to start your seed business, explore various funding options like traditional lenders, private loans, investors, and even selling personal assets.

Additionally, investigate the availability of government grants tailored to support new business ventures in the seed industry.

Considerations When Meeting with a Loan Officer:

• Business Plan: Prepare a comprehensive business plan showcasing your seed business’s viability, including financial projections.
• Credit History: Ensure your personal and business credit histories are in good standing.
• Collateral: Be ready to discuss collateral options to secure the loan.
• Loan Amount: Determine the exact amount you need and how it will be utilized.
• Repayment Plan: Outline a clear repayment plan, including interest rates and terms.
• Alternative Options: Be open to discussing alternative funding solutions and potential risks.

Sample List of Documents Needed for a NEW Business Loan Application:

• Business Plan
• Personal and Business Credit Reports
• Collateral Documentation (if applicable)
• Financial Projections and Statements
• Legal Entity Documentation (e.g., LLC or Corporation)
• Personal and Business Tax Returns
• Business License and Permits
• Resumes of Key Team Members
• Bank Statements
• Debt Schedule (if applicable)
• Industry and Market Research Data
• Loan Application Forms
• Any Additional Information as Requested by the Lender

Preparing these documents and considering key factors will help streamline the loan application process and increase your chances of securing the necessary funding for your seed business.

For more, see the following:

• Getting a Small Business Loan
• SBA Small Business Grants
• Seed Business Start-up Loans
• Grants For a Seed Business

13. Software Setup

Researching software for your seed business is crucial because transitioning to a new system after data is in another program can be challenging.

Opt for a reputable company with a history, that ensures ongoing support. Take advantage of software demos to evaluate compatibility and functionality. Software reviews and forums offer valuable insights from others’ experiences.

Additionally, consider software for expense tracking and financial document preparation for tax filing. Consult with a bookkeeper or accountant for informed choices.

Types of Software for Seed Business Management and Operations:

• Inventory Management Software: Tracks seed inventory, orders, and stock levels.
• Accounting Software: Manages financial transactions, expenses, and tax preparation.
• Customer Relationship Management (CRM) Software: Maintains customer data, order history, and communications.
• E-commerce Platform: Supports online sales and order processing.
• Website Content Management System (CMS): Manages online content and product listings.
• Email Marketing Software: Facilitates customer outreach and promotions.
• Social Media Management Tools: Schedules posts and analyzes social media performance.
• Point of Sale (POS) Software: Processes in-store sales and tracks inventory.
• Analytics and Reporting Software: Generates business insights and performance metrics.
• Project Management Software: Coordinates tasks and projects for efficiency.
• Seed Quality Management Software: Ensures seed quality and compliance.
• Employee Payroll and HR Software: Manages employee payroll, benefits, and records.
• Shipping and Logistics Software: Streamlines order fulfillment and shipping operations.

Choosing the right software for each aspect of your seed business enhances efficiency, accuracy, and overall management capabilities.

Check out Google’s latest search results for software packages for a seed business.

14. Get The Right Business Insurance

Insurance is a must for your seed business, safeguarding against unforeseen incidents. Prioritize:

• General Liability Insurance: Protects customers, employees, and property from accidents or injuries on your premises.
• Professional Liability Insurance: Shields against legal claims stemming from professional errors or negligence.
• Business Interruption Insurance: A lifeline for operations during involuntary shutdowns due to incidents, ensuring financial stability.
• Home-Based Business Considerations: If operating from home, inform your home insurance agent to prevent the nullification of existing policies.

Utilize a competent insurance broker’s expertise to navigate your coverage needs, ensuring comprehensive protection for your seed business, customers, and assets in the face of unexpected events.

For more, see What to Know About Business Insurance . You can also browse the latest Google search results for seed business insurance .

15. Suppliers and Service Providers

A seed business relies on suppliers and service providers for critical elements:

• Seed Suppliers: The primary source of your seed inventory.
• Packaging Suppliers: Providing materials for seed packaging.
• Shipping and Logistics Services: Ensuring timely delivery of products to customers.
• IT and Website Services: Maintaining and updating your online presence.
• Legal and Accounting Services: Legal compliance and financial management.
• Marketing Services: Advertising and promotional support.

A strong relationship with suppliers and service providers is vital. They contribute to competitive pricing, ensuring product availability, and maintaining business operations.

Treating them respectfully and ensuring mutual financial benefits fosters positive working relationships, enhancing your seed business’s overall success.

For More, See How To Choose a Supplier.

16. Setting Prices

Benefits of Pricing Research for Starting a Seed Business:

• Market Alignment: Ensures your pricing aligns with market expectations and competitive rates.
• Balanced Approach: Helps find the right balance between attracting customers and generating profit.
• Competitive Edge: Allows you to emphasize the unique value your seeds offer in the market.

Consequences of High Prices:

• Sales Loss:  Excessive prices may deter potential customers, leading to reduced sales.

Consequences of Low Prices:

• Short-Term Gain, Long-Term Strain:  Attracting more customers initially may not cover operational expenses in the long run.

Finding the Optimal Balance:

• Reflect Market Standards: Price in line with current market rates.
• Emphasize Value: Highlight seed quality, special features, guarantees, and exceptional customer service.
• Periodic Review: Revisit pricing to stay competitive and adapt to market fluctuations, ensuring long-term sustainability and success.

See the following for more:

• Setting the Price of Your Products and Services
• Search Results for Pricing Strategies for a Seed Business.

17. Physical Setup

In a seed business, the physical inventory is a crucial aspect. Start by acquiring and displaying products that your customers desire, focusing on variety and value.

It’s essential to strike a balance in inventory management.

Excessive stock ties up capital that could be utilized elsewhere, while insufficient stock leads to missed sales opportunities.

Experiment with different displays to optimize sales strategies effectively.

Expiry Dates:

Be mindful of expiry dates, particularly for products with limited shelf life. Avoid carrying items with impending expiration dates to prevent waste and ensure customer satisfaction.

Striking the right balance in stock rotation and management is essential for maintaining product quality.

While a seed business might be online or a hybrid model, having an organized work area is essential.

Your layout should include a well-structured shelving system for seed storage, keeping products organized and easily accessible.

Proper storage conditions, such as temperature and humidity control, are vital to maintain seed quality. Additionally, designate areas for packaging, labeling, and order fulfillment, optimizing workflow efficiency.

Effective signage is essential, even for online businesses. A prominent main business sign enhances visibility and professionalism.

Consider adding signs in relevant locations, such as parking lots, exits, and special areas, to guide customers and improve their overall experience.

Well-designed signage conveys a sense of trustworthiness and reliability in your seed business.

Office Setup:

Managing a seed business can be time-consuming, making an organized office space critical.

Ensure your office is well-equipped with the necessary tools, including computers, printers, and communication devices, to efficiently manage orders, customer inquiries, and administrative tasks.

Keep essential documents and records well-organized for quick access. An organized office not only enhances productivity but also creates a conducive environment for business growth and success.

See Here are Considerations for The Setup of Your Office for tips and ideas to make your office work for you. Also, have a look at our article About Company Signs.

18. Creating a Website

A website is indispensable for your seed business, serving as the primary point of contact and a crucial informational hub.

Unlike social media accounts, a website offers ownership and control when you host and register a domain name.

It also doubles as a potent marketing tool.

Through blogging and sharing industry insights, your website becomes a platform to build trust and expertise in your customers’ eyes.

By providing valuable tips tailored to your audience, you establish yourself as a knowledgeable authority in the seed industry.

This digital presence not only enhances credibility but also offers a convenient way for customers to learn about your products, services, and brand, contributing significantly to your business’s growth and success.

For more, see How to Build a Website for Your Business .

19. Create an External Support Team

An external support team for your seed business consists of trusted advisors and professionals who provide services on a project, contract, hourly, or retainer basis.

These individuals are not on your payroll but play crucial roles in your business’s success.

While you may already work with some, recognizing them as a dedicated team emphasizes their importance and allows for future additions. Building these relationships takes time but is an ongoing effort.

Your team can comprise various specialists, including accountants, lawyers, financial advisors, marketing experts, technical advisors, and consultants.

When you have a strong support network, you can readily access their expertise when needed, ensuring your seed business operates smoothly and efficiently.

Cultivating these relationships is an essential aspect of long-term business growth and success.

For more, see Building a Team of Professional Advisors for Your Business.

20. Hiring Employees

Running your seed business solo in the early stages is cost-effective, especially due to payroll expenses.

However, as your business expands, you might need to hire employees. Hiring qualified and ethical personnel is crucial.

The following are job positions or outsourced services you may want to consider as your seed business grows:

• Operations Manager: Overseeing day-to-day activities, inventory, and production.
• Sales and Marketing Manager: Developing marketing strategies and managing sales efforts.
• Customer Service Representative: Handling inquiries, orders, and resolving customer issues.
• Seed Technician: Managing seed processing, sorting, and quality control.
• Accountant/Financial Analyst: Handling financial transactions, budgeting, and financial analysis.
• Logistics Coordinator: Managing shipping, inventory logistics, and distribution.
• Website Developer/Designer: Maintaining and enhancing the business website.
• Content Writer/Blogger: Creating informative content for blogs, newsletters, and social media.
• Human Resources Manager: Overseeing recruitment, training, and employee relations.
• Legal Counsel: Ensuring compliance with regulations and managing contracts.
• Graphic Designer: Designing marketing materials and seed packet labels.
• IT Support: Managing technical aspects, software, and hardware.
• Social Media Manager: Handling online presence and engagement on social platforms.
• Seed Quality Analyst: Monitoring seed quality and conducting tests.
• Sustainability Specialist: Focusing on eco-friendly practices and certifications.
• PR and Outreach Coordinator: Managing public relations and community engagement.
• Shipping and Packaging Specialist: Ensuring efficient packaging and shipping processes.
• Market Research Analyst: Gathering data on market trends and competitors.
• Garden Consultant: Offering gardening advice and support to customers.
• Account Manager: Maintaining relationships with bulk buyers and distributors.
• Quality Control Inspector: Ensuring seeds meet quality standards.
• Photographer/Videographer: Creating visual content for marketing.

Consider outsourcing services such as legal advice, accounting, and IT support until your business can support in-house positions for these roles.

For more, see How and When to Hire a New Employee.

21. Getting Customers Through the Door

When you have reached this step, your business is set up and ready to go, with one more final step, which is important: getting customers through the door.

There are numerous ways to do this, like advertising, having a grand opening , word of mouth, etc.

Let’s dig a little deeper into the following sections.

Marketing Considerations

A seed business’s essence lies in its customers. Attracting the right clientele, especially in the initial stages, can be challenging as awareness is limited.

However, as you build a reputable brand over time, marketing becomes more manageable, aided by experience.

Effective marketing is an ongoing endeavor. The more you invest in it, the greater your revenue potential. While not always necessary, marketing agencies or experts can be valuable allies when the fit is right.

Simplify your marketing by considering it an opportunity for business awareness, to be seized whenever possible.

Simple Methods to Promote Your Seed Business:

• Social Media: Create profiles on platforms like Facebook, Instagram, and Pinterest . Share gardening tips, showcase your seeds, and engage with your audience.
• Website and Blog: Build a professional website with information about your seeds, gardening advice, and a blog to demonstrate your expertise.
• Local Events: Participate in farmers’ markets, garden expos, or local fairs to directly reach your community.
• Networking: Join gardening clubs, associations, or online forums to connect with gardening enthusiasts.
• Customer Testimonials: Encourage satisfied customers to leave reviews and testimonials that can boost your credibility.
• Seed Packets: Design eye-catching seed packet labels with your business name and website for a subtle yet effective promotion.
• Collaborations: Partner with local nurseries, landscapers, or related businesses for cross-promotions.
• Email Marketing: Create a mailing list and send out regular newsletters with gardening tips, promotions, and updates.
• Google My Business: Register your business for local searches, improving visibility in Google search results.
• Referral Program: Incentivize your existing customers to refer others by offering discounts or free seeds for successful referrals.

These methods can help you gradually build awareness and attract customers to your seed business without the need for extensive marketing expertise.

See How To Get Customers Through the Door and our marketing section to provide ideas to help you bring awareness to your business.

Sample Ad Ideas:

Ad 1: Headline: “Grow Your Dream Garden with Us!” Transform your backyard into a lush paradise with our premium seeds. From colorful flowers to tasty veggies, find your perfect seeds here.

Ad 2: Headline: “Seeds for Every Season!” Discover the seeds you need for every season. Plant today, harvest tomorrow. Explore our diverse selection and bring your garden to life!

Ad 3: Headline: “Bloom with Us – The Seed Specialists!” Unleash your inner gardener with our expertly curated seed collection. From beginners to enthusiasts, we have seeds for everyone. Explore now!

Ad 4: Headline: “Green Thumb Delight!” Get your green thumb on! Shop our high-quality seeds and watch your garden flourish. Start planting today – the beauty begins here.

Ad 5: Headline: “Sow the Seeds of Beauty!” Plant the seeds of beauty with our exquisite collection. Choose from rare varieties and create a garden that turns heads. Explore now and sow the magic!

Building strategic partnerships with complementary businesses can be mutually beneficial. For a seed business, consider collaborating with:

• Garden Centers/Nurseries: Partner with local garden centers or nurseries to cross-promote your seeds with their plants. They can refer customers seeking seeds while you refer customers in need of plants, creating a symbiotic relationship.
• Landscaping Companies: Landscapers often require seeds for various projects. Offer them referral fees or discounts, and they can recommend your seed business to their clients.
• Farm Supply Stores: Collaborate with stores selling farm supplies or agricultural equipment. Your seeds could be a valuable addition to their inventory, and you can reciprocate by referring farmers to them for equipment needs.
• Community Gardens: Support local community gardens by providing seeds and gardening resources. In return, they can direct community members to your business for their seed needs.
• Online Gardening Influencers: Partner with popular gardening bloggers, YouTubers, or social media influencers. They can review your products and refer their followers to your online store.
• Local Restaurants/Farm-to-Table Businesses: Restaurants seeking locally sourced ingredients might appreciate your seeds. Offer a referral program, and they can recommend your business to their suppliers.
• Educational Institutions: Partner with schools, colleges, or gardening clubs to provide educational resources and discounts on seeds for students and members.
• Real Estate Agents: Real estate professionals can refer homeowners looking to enhance their landscapes. You can reciprocate by referring new homeowners to their services.
• Environmental Nonprofits: Collaborate with organizations focused on sustainability and environmental conservation. They can promote your eco-friendly seed options to their supporters.
• Online Seed Swap Communities: Engage with online seed swap communities where gardeners exchange seeds. You can participate, offering unique seeds and gaining exposure among dedicated gardeners.

Remember, the key to successful partnerships is providing value to your collaborators and their customers.

The reward system could include referral fees, reciprocal referrals, co-marketing efforts, or exclusive discounts, ensuring a win-win for all parties involved.

Points To Consider

Next, let’s review essential points for more tips, insights, and considerations before starting your seed business.

We will cover sections, including skills to consider, points to focus on, and equipment. Then you’ll reach the “Knowledge Is Power,” section, where you will want to use the resources for valuable information.

Hours of Operation:

Hours of operation for a seed business can vary but generally align with customer convenience. Consider weekday hours, such as 9 AM to 5 PM, to accommodate regular shoppers.

Additionally, weekend hours, like 10 AM to 4 PM, can cater to gardening enthusiasts. Online sales can extend accessibility beyond traditional hours.

Adjust based on customer demand and location, ensuring a balance between service availability and operational efficiency.

A List of Equipment and Supplies to Consider for a Seed Business:

• Seed Storage Containers: Airtight containers for safe seed storage.
• Seed Sorting Machine: To separate seeds based on size and quality.
• Seed Cleaning Equipment: Includes screens, air separators, and gravity separators for cleaning seeds.
• Seed Treatment Equipment: For coating seeds with fungicides or insecticides if needed.
• Seed Packaging Machinery: Machines for weighing, filling, and sealing seed packets.
• Labeling Machine: To apply product labels on seed packets.
• Seed Germination Testing Equipment: Includes germination chambers and testing kits.
• Greenhouses: For seedling propagation and plant growth.
• Irrigation System: To ensure consistent water supply for seedlings.
• Soil Testing Kits: For assessing soil quality and suitability for seed planting.
• Harvesting Equipment: Depending on the scale, this may include hand tools or mechanical harvesters.
• Drying Equipment: For reducing seed moisture content before storage.
• Seed Quality Testing Tools: Such as moisture meters and seed counters.
• Transportation Vehicles: If dealing with large quantities, consider trucks or vans for seed delivery.
• Computer and Software: For inventory management, record-keeping, and analysis.
• Office Equipment: Including desks, chairs, and communication tools.
• Safety Gear: Personal protective equipment for employees working with seeds and chemicals.
• Shelving and Storage: To organize and store seeds and equipment.
• Security System: To protect valuable seed inventory.
• Seed Catalog Printing Equipment: If producing seed catalogs.
• Greenhouse Climate Control Systems: For temperature and humidity regulation.
• Weighing Scales: For accurate measurement during packaging.
• Forklift or Pallet Jack: For moving heavy seed bags or containers.
• Seed Extractors: For removing seeds from fruits or pods if applicable.
• Seed Coating Machine: For adding coatings or treatments to seeds.
• Seed Grading Equipment: To classify seeds based on quality and size.
• Packing Tables: Workstations for packaging and labeling seeds.
• Tractor and Implements: If involved in large-scale seed production on a farm.
• Seedling Trays and Pots: For starting seedlings in a nursery.
• Seedling Transplanters: For efficient transplanting in the field or greenhouse .

Note: The specific equipment needs may vary based on the scale and type of seed business, from small-scale retail to large-scale production and distribution.

Seed Buyer Guides

Buyer guides provide valuable insights, often offering perspectives and information that you may not have been aware of, enhancing your understanding from a customer’s viewpoint.

See the latest search results for seed buyer guides.

Key Points To Succeeding in a Seed Business

To succeed in operating a seed business, consider these essential points:

• Niche Focus: Specialize in a specific seed niche to differentiate yourself and meet unique customer demands effectively.
• Customer Base: Building an initial customer base is challenging but essential during the startup phase. Utilize marketing strategies to attract early adopters.
• Relationship Building: Foster strong connections with customers, suppliers, and employees. Trust and rapport are crucial for long-term success.
• Customer-Centric Approach: Provide products and services aligned with customer needs and preferences. Solicit and act on customer feedback to refine offerings.
• Exceptional Service: Prioritize top-notch customer service; your customers are the lifeblood of your business.
• Value Delivery: Continuously offer value to customers to retain their loyalty and attract new ones.
• Team Building: Hire the right people for each role, creating a competent and motivated team vital for business success .
• Effective Management: Manage staff effectively, respecting and fostering a healthy work environment that enhances retention.
• Financial Management: Closely monitor cash flow and control costs without compromising quality or service.
• Adaptability: Embrace change, whether industry shifts, technological advances, or evolving business processes, to stay competitive.
• Revenue Fluctuations: Prepare for revenue fluctuations by maintaining a financial cushion and diversifying revenue streams.
• Competition: Address both new and existing competition by continuously assessing market dynamics and adjusting strategies.
• Effective Marketing: Invest in effective marketing, whether in-house or with professionals, to create awareness and attract customers to your seed business. The successful operation combines these elements to build a thriving venture in the seed industry.

Focusing on your skill set and assessing its suitability for running a seed business is paramount.

Success in this industry demands a combination of agricultural knowledge, business acumen, and interpersonal skills. Without these, the venture can face significant challenges.

If a crucial skill is lacking, two options arise: acquiring the knowledge or hiring someone proficient in that area.

For instance, if marketing expertise is missing, you can either educate yourself or hire a marketing professional.

Essential Skills for a Seed Business Owner:

• Agricultural Knowledge: Understanding seed varieties, planting, cultivation, and pest management is fundamental.
• Business Management: Proficiency in financial management, budgeting, and strategic planning is crucial.
• Market Research: Identifying consumer needs, market trends, and competitors is vital for product positioning.
• Sales and Marketing: Skills in product promotion, distribution, and customer relations are essential.
• Networking: Building relationships with suppliers, distributors, and industry peers aids growth.
• Adaptability: Ability to respond to changing market dynamics and adapt strategies accordingly.
• Problem-Solving: Troubleshooting issues related to crop health, logistics, and customer satisfaction.
• Communication: Effective communication with stakeholders, employees, and customers is key.
• Legal and Regulatory Knowledge: Comprehending industry regulations and compliance is necessary for business operations.
• Technological Literacy: Proficiency in agricultural technology and software for data analysis and farm management.

Knowledge Is Power if You Use It!

Leverage industry knowledge for success.

Abundant information is available for startups and ongoing operations through the provided links. Knowledge is a powerful asset.

Trends and Statistics

Analyzing industry trends and statistics informs strategic decisions, identifies growth opportunities, and ensures a seed business stays competitive and relevant in the market.

See the latest search results for trends and statistics related to the seed industry.

Seed Associations

Trade associations provide benefits such as industry news updates and networking opportunities.

See the search results on seed associations and the benefits of Joining the Chamber of Commerce.

The Top Seed Suppliers

Studying an established seed business can inspire ideas, reveal industry gaps for competitive advantages, and uncover overlooked offerings from competitors.

See the latest search results for the top seed suppliers.

The Future of the Seed Industry

Researching the industry’s future helps seed business owners anticipate trends, identify opportunities, and prepare for changing market demands.

See the search results for the future of the seed industry.

Find a Seed Business For Sale

Pros of Buying an Established Seed Business:

• Immediate Revenue: Start earning from day one.
• Bypass Startup Phase: Skip the challenges of launching a new business.
• Proven Success: You know the business model works.
• Financial Clarity: Understand existing revenue, expenses, and profit.
• Existing Customer Base: Benefit from a pre-established clientele.
• Established Reputation: The business already has a brand presence.

Cons of Buying an Established Seed Business:

• Higher Cost: Goodwill and customer base acquisition increase the purchase price.
• Risk of Losing Customers: Changing operations may alienate existing clients.
• Inherited Reputation: You acquire both positive and negative aspects of the business’s reputation.

Even if you can’t find an exact seed business for sale, explore similar opportunities in the industry through the provided link.

The latest search results for a seed business for sale and others in the same category.

Franchise Opportunities Related to a Seed Business

Pros of Owning a Seed Franchise:

• Proven Business Model:  Follow the corporate office’s established plan for success.
• Reputation and Marketing:  Benefit from the franchise’s existing reputation and marketing efforts.
• Comprehensive Knowledge:  Receive thorough training and insights about the business beforehand.
• Corporate Support:  Access ongoing support and guidance from the corporate office.

Cons of Owning a Seed Franchise:

• High Costs:  Initial investment and ongoing fees can be expensive.
• Limited Autonomy:  Major changes require approval from the corporate office.
• Strict Product/Service Constraints:  You must adhere to approved products and services.
• Operational Restrictions:  Your business operations are bound by the franchise agreement.
• Ongoing Franchise Fees:  Continual payments to the franchise are required.

Even if an exact seed business franchise isn’t available, consider exploring related franchises within the industry for potential opportunities.

You can use the provided link for research.

See the latest search results for franchise opportunities related to this industry.

Customer Expectations

Explore search results for seed customer expectations to align with their needs and surpass expectations. Uncover potential issues, ensuring comprehensive coverage and customer satisfaction.

See the search results related to customer expectations for seeds.

Expert Tips

Expert tips benefit both novices and experts by offering fresh perspectives and skill enhancements, fostering continuous growth in the field.

See the latest search results for seeds to gain tips and insights.

Seed Business Insights

Reviewing tips and insights can spark innovative ideas, help avoid pitfalls in your seed business, and boost your industry knowledge effectively.

See the latest search results about insights into running a seed business.

Seed Forums

Engage in seed forums to network and gain insights from industry peers.

These platforms also provide valuable customer perspectives for enhanced understanding.

See the latest search results related to seed forums.

Enroll in online or local courses to enhance seed business skills and knowledge effectively.

See the latest courses that could benefit a seed business owner . Also, see our management articles for tips and insights for managing your business.

Subscribe to seed blogs for fresh ideas and industry updates.

Gradually prune those lacking updates or value, curating a valuable collection for a steady flow of seed-related information.

Look at the latest search results for seed blogs to follow.

News is a valuable source to stay updated on seed-related media coverage, providing current information and insights on seed-related stories.

See the latest results for seeds in the news.

YouTube sees daily uploads of new videos. Many offer valuable seed-related insights worth exploring. Spend a few minutes discovering this priceless information.

YouTube videos related to seeds.

Privacy Overview

The 6 stages of a startup (and how to master each).

A startup example in the pre-seed stage: AERA Health.

Founded in 2022, AERA Health is a Swiss startup in preventive health technology. Its mission is to motivate the next generation of healthcare professionals to tap into their full potential and make a positive impact on the world.

In March 2023, the startup received €4,000,000 in pre-seed funding from five investors.

How to master the pre-seed stage and who can help.

According to a CB Insights report , 35% of startups fail because there’s no market need for their offer.

Talking with and listening to your target audience is a crucial step to determine if there’s a real pain you’re alleviating. Conduct market research, surveys and interviews to thoroughly understand your audience.

Accurate, thorough market research isn’t cheap. You need to go beyond your personal investments to make it worthwhile. This means seeking out funding from initial investors. While you may be gung-ho to start hunting down VCs, it’ll be nearly impossible to convince them with the paper napkin business idea you have at this point.

Instead, your best bet is to pitch your business plan to your personal network . Just remember, you should still get everything down in writing. This goes for any contracts, funding and partnership agreements, copyrights and any other legal documents. If you wait until later stages to get official documents signed up, you could be dealing with headaches, paperwork and potentially lawsuits down the road. Read more about IP protection for startups .

In the seed stage, you completed initial product and market research and it has shown viable demand for your solution. You’ve got more than an idea. You’ve got the data to back up that your offer can be a real solution in the marketplace.

Now, it’s time to gain early financial support to turn your idea into a functioning business. This is where seed funding comes in. In this stage, you validate your entire business model.

You conduct experiments and carry out market testing to make your product and operations more tangible. Just keep in mind, the goal here is to validate your initial value hypothesis with a working prototype.

While the pre-seed phase is known as the “idea phase,” the seed phase is known as the “prototype phase” as you do need to have a prototype to test. This doesn’t mean you have to have a minimum viable product (MVP) yet—that will come in the early stage.

A startup example in the seed stage: seniors@work.

Alexis Weil founded seniors@work in 2019. The idea developed when Alexis’ father retired – he still felt fit and was keen to work. At the same time, companies face the challenge of finding skilled staff to fill their vacancies. The platform connects skilled senior talents with the labor market.

seniors@work had a successful appearance in the TV show “Lion’s Den Switzerland” and gained CHF 60,000 in seed money.

How to master the seed stage and who can help.

According to a 2022 Skynova survey , 47% of startups failed due to a lack of financing. This is perhaps the toughest stage to master. It’s one thing to convince your mom or best friend to give you a few thousand dollars for your idea. It’s an entirely different challenge to convince investors to trust you with millions of dollars.

To master the seed stage, you need to make multiple iterations of your product to create the right market solution.

Think of it as chiseling a basic stone statue down to form a masterpiece. This means even more experimenting, market testing and adjustments to your marketing strategy.

In terms of financing, you need to begin connecting with the right people . To succeed in the seed stage, you best rely on multiple startup funding sources. These include your revenue, angel investors, crowdfunding and accelerators. Since your business is still in its initial stages, it’s a major risk for investors. This usually means you have to hand over an equity stake in your business in return.

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The early stage is also known as “Series A.”

If you’ve got this far, hats off to you! According to VentureBeat , only 7.5% of seed-stage startups advance into an early-stage startup.

An early-stage startup , or Series A, is typically defined by having achieved a first round of venture capital financing.

Succeeding in this stage is only possible once your company has crafted a minimum viable product (MVP), established a sizable customer base and has a steady stream of monthly revenue.

A startup example in the early stage: Lyfegen.

Founded in 2018, Lyfegen is a global software analytics startup that provides an outcome and value-based agreement platform for pharmaceutical companies, health insurance companies, medtech companie s and hospitals around the world.

In September 2022, Lyfegen raised $8 million in Series A funding from two investors, led by aMoon Fund.

How to master the early stage and who can help.

You have the first version of your product on the market, but it’s not fully refined. Think about the stone state mentioned earlier. It’s not David’s Michaelangelo yet, but it’s almost there.

One of the biggest challenges is proving your offer can generate revenue beyond the short term. You need to perfect your pitch deck and begin focusing heavily on venture capital (VC) firms. If you get one of them to invest, they’ll serve as an “anchor”, making it easier to attract additional investors.

Investors want to know what return on investment (ROI) they get with your startup. Incubators and accelerators such as BaseLaunch are helpful to get you investment-ready.

If you’ve made it past the early stage, chances are, your business is going to make it.

You’ve likely raised millions in capital, proven that your offer has market demand, got a great customer base and received offers to purchase your business.

It’s time to focus on growing your startup. To do that, you secure Series B and C investments.

A startup example in the growth stage: Alentis Therapeutics.

Founded in 2019, Alentis Therapeutics is a Swiss-French biotech startup developing novel therapeutics in cancer and liver disease.

In April 2023, the startup received $105 million in Series C funding from six companies, led by Jeito Capital.

How to master the growth stage and who can help.

More funding than before is essential to scale your business to a wider market and maintain long-term profitability.

Venture capitalist firms are still at the forefront of your growth-fueling funding. Investment banks, private equity firms and hedge funds might start to take interest in your company, too.

One major part of the growth stage is scaling your team. You need the right people in the right place.

Scaling a company is a highly strategic endeavor. Scaling up too quickly could mean burning through your resources faster than revenue comes in. If you scale too slowly, you risk not being able to supply growing demand or fail to meet deadlines.

As a founder, you can’t wear all the hats anymore. You have to lean on the right people, including startup mentors , to reach the next stage.

The next stage (and final stage for many founders), is the expansion stage. You’re already profitable and self-sufficient. Many people will no longer consider your business a startup. With the greater market in mind, your goal is to expand further.

A key indicator that you’re in the expansion stage is if you’ve managed to grow more than 20% annually for three consecutive years (in billing or employee count). At this point, your startup becomes a “scaleup,” according to the Scaleup Institute .

A startup example in the expansion stage: Acrotec.

Founded in 2013, Acrotec is an innovative group of companies based out of Develier, Switzerland. Acrotec’s Medtech division is one of the leading European Medtech subcontractors that primarily develops implants and instruments for spine surgery, extremities and maxillo-facial procedures as well as dental applications with implants.

In February 2023, Acrotec acquired its first U.S. company Axial Medical, a precision medtech manufacturer based in Warminster, Pennsylvania.

How to master the expansion stage and who can help.

In the expansion stage, you likely venture into the global market or expand by offering different products or services in other market segments.

You can also start considering acquisitions to accelerate expansion and take up a greater market share.

To tap into expansion, startup founders and executives typically seek outside counsel such as startup mentors and other founders who have gone through the expansion phase themselves. The further you go through each stage, the more you must rely on help, guidance and strategic partnerships to fuel business growth.

We’ve heard of the final startup stage many times before: “The Exit.”

This stage is optional and is oftentimes presented to founders naturally.

The foundation for a proper exit starts early: The values and assets you build will define the price of your venture. The relationships you foster will contribute to the trust that potential buyers have in you. Mastering “The Exit” depends on your goals. If the opportunity for an exit arises, the first critical decision is to determine whether you continue expanding your current business venture. It’s essential to assess the state of your startup and your own aspirations carefully.

There are three main ways to exit:

• Sell founder’s shares to another company
• Get acquired by another company
• Initial Public Offering (IPO)

A startup example in the exit stage: NBE-Therapeutics.

Founded in 20121997, the biotech company NBE-Therapeutics is engaged in developing antibody-drug conjugates (ADCs) and advancing targeted cancer therapies by using its immune stimulatory iADC platform.

In 2020, the Germany-based pharma company Boehringer Ingelheim acquired NBE-Therapeutics for $1.4 billion. Today, NBE-Therapeutics is a wholly owned subsidiary of Boehringer Ingelheim.

How to master the exit stage and who can help.

Successfully navigating “The Exit” stage requires planning and the right support. To master this stage, consider the following steps:

Define Your Exit Strategy: Start by outlining your goals and the outcomes you wish to achieve with your exit. Determine whether you want to sell founder’s shares, get acquired, or go public through an IPO. The choice should align with your long-term vision and the values your startup represents.

Build Valuable Relationships: Recognize that the groundwork for a successful exit is often laid well in advance. Cultivate valuable relationships in your industry and establish trust with potential buyers or investors. These connections can significantly impact the outcome of your exit.

Timing Is Key: Acknowledge that the timing of your exit is crucial. Market conditions and investor sentiment can significantly affect the success of your exit. Be aware that the current landscape may be more challenging for startups to secure favorable deals than it was in previous years.

Legal Support: Engage a team of experienced lawyers who specialize in mergers and acquisitions, IPOs or other relevant areas. Legal professionals can ensure that your exit proceeds smoothly, all regulatory requirements are met, and your interests are protected throughout the process.

” Startup mentors work closely with entrepreneurs to help them develop their ideas. They help to validate their business models, navigate challenges and make informed decisions. Adrian Sprenger Manager Entrepreneurship at Basel Area Business & Innovation

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How to Start a Profitable Seed Business [11 Steps]

By Nick Cotter Updated Feb 02, 2024

Business Steps:

1. perform market analysis., 2. draft a seed business plan., 3. develop a seed brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for seed., 6. open a business bank account and secure funding as needed., 7. set pricing for seed services., 8. acquire seed equipment and supplies., 9. obtain business insurance for seed, if required., 10. begin marketing your seed services., 11. expand your seed business..

Starting a seed business requires a thorough understanding of the market to identify demand, competition, and potential niches. A well-conducted market analysis can provide valuable insights that will guide your business strategy and help you make informed decisions. Here are some key steps to perform a successful market analysis:

• Identify Your Target Market: Determine who your potential customers are, their preferences, and buying habits. Consider factors such as location, demographics, and the types of crops or plants they are interested in.
• Analyze Competitors: Look at existing seed companies to understand their product offerings, pricing strategies, strengths, and weaknesses. This will help you find opportunities to differentiate your business.
• Assess Market Trends: Stay informed about the latest trends in agriculture, horticulture, and consumer preferences. This includes organic seeds, heirloom varieties, and sustainability practices.
• Regulatory Environment: Familiarize yourself with the legal requirements and certifications necessary to sell seeds, such as germination rates and seed treatment regulations.
• Supply Chain Analysis: Study the entire supply chain from production to distribution. This will help you identify potential partners, suppliers, and distribution channels.

Are Seed businesses profitable?

Yes, seed businesses can be profitable. Seed businesses can generate revenue by selling seeds to consumers, wholesalers, and other businesses. They can also generate income by providing services such as seed cleaning, packaging, and storage. Additionally, seed businesses may offer consulting services, seed testing, and marketing support.

Embarking on the journey of starting a seed business requires a well-crafted business plan to steer the venture towards growth and profitability. Your seed business plan should outline your goals, strategies, and the detailed roadmap to success. Here's a draft to help you get started:

• Define your business mission and vision, including the types of seeds you plan to sell and your target market.
• Analyze the market to understand demand, competition, and pricing strategies.
• Detail your product line, including any specialty or unique seeds that will differentiate your business.
• Outline your supply chain, from sourcing seeds to packaging and distribution.
• Develop a marketing plan that covers branding, promotional strategies, and online presence.
• Explain your sales strategy, whether it's direct-to-consumer, wholesale, or a mix of channels.
• Include a financial plan with startup costs, pricing models, revenue projections, and break-even analysis.
• Discuss your business structure, management team, and any personnel needs.
• Identify potential risks and challenges and how you plan to mitigate them.
• Set short-term and long-term objectives with measurable milestones to track progress.

How does a Seed business make money?

A seed business makes money by selling seeds to customers for home gardening, landscaping, and other agricultural purposes. Customers can purchase seeds from seed companies in bulk or in individual packets. The target audience for a seed business can include home gardeners, landscapers, farmers, and other agricultural professionals. By marketing their products to these target audiences, seed businesses can generate revenue from sales and advertising. For example, an antique seed business can target antique gardeners who are looking for unique and hard-to-find seed varieties to add to their collections.

Developing a seed brand is a crucial step in establishing a distinct identity in the market. A strong brand will help differentiate your seeds from competitors and build customer loyalty. Here are some key points to consider when creating your seed brand:

• Define Your Unique Selling Proposition (USP): Identify what makes your seeds special, be it their organic nature, heirloom qualities, or unique varieties that are not commonly found elsewhere.
• Create a Memorable Name and Logo: The name should be catchy, easy to remember, and reflective of the qualities of your seeds. Design a logo that is visually appealing and represents your brand's ethos.
• Establish Your Brand Voice: Decide on the personality and tone of your brand, whether it's friendly, professional, or passionate about sustainability, and ensure it's consistent across all communications.
• Design Packaging That Stands Out: Use packaging that not only protects the seeds but also catches the eye. Consider using eco-friendly materials to appeal to environmentally conscious consumers.
• Build a Story Around Your Brand: Share the journey of your seed business, the passion behind it, and the values that drive it. A compelling story can connect with customers on an emotional level.

How to come up with a name for your Seed business?

When coming up with a name for your seed business, it is important to focus on something that will stand out and be memorable. Consider a name that clearly communicates the type of seeds that you are selling and that also reflects your brand identity. Brainstorm ideas and research potential names to ensure that your business name is unique and not already taken. Take your time and make sure that the name you choose feels right and is something that you can be proud of.

Formalizing your business registration is a critical step in launching a successful seed business, as it provides legal protection and establishes your operation as a legitimate entity. This process varies depending on your location and the business structure you choose. Below are the key actions to take to ensure your seed business is properly registered:

• Choose a business structure (e.g., sole proprietorship, partnership, LLC, corporation) that best suits your needs and understand the implications for taxes and liability.
• Register your business name with the appropriate state authority, ensuring it's unique and meets all naming requirements.
• Obtain an Employer Identification Number (EIN) from the IRS for tax purposes, even if you don't have employees.
• Apply for any necessary business licenses and permits specific to seed selling and distribution in your area.
• Register for state and local taxes to ensure you can legally collect sales tax from customers if required.
• Understand and comply with the Federal Seed Act and any other agricultural regulations that pertain to labeling and seed quality.
• Consider registering for intellectual property protection if you have created unique seed blends or branding.

Resources to help get you started:

Explore pivotal resources designed specifically for hydroseeding entrepreneurs aiming to understand market trends, optimize operations, and enhance business strategies:

• International Association of Hydroseeding Professionals: Offers industry reports, professional development resources, and networking opportunities. https://www.hydroseeding.org/
• Hydroseeding and Hydromulching Industry Market Reports: Provides comprehensive market analysis, trends, and forecasts. http://marketresearch.com/
• Landscape Management Magazine: Features articles on the latest trends in landscaping, including hydroseeding, and offers business management tips. https://www.landscapemanagement.net/
• Green Industry Pros: Delivers business growth strategies, equipment reviews, and operational advice tailored to the hydroseeding sector. https://www.greenindustrypros.com/
• Erosion Control Technology Council: Provides guidelines, best practices, and resources for effective erosion control, including hydroseeding. https://www.ectc.org/

Starting a seed business requires strict adherence to the regulatory framework governing the sale of seeds. To ensure compliance and legal operation, acquiring the necessary licenses and permits is crucial. Here is a checklist to guide you through the process:

• Contact your local and state agricultural departments to inquire about specific seed selling regulations, as they vary by region.
• Apply for a business license to legally operate your seed business within your municipality or state.
• Secure a Seed Dealer's License if it's required in your state, which permits the sale of seeds to the public.
• Obtain phytosanitary certificates for seeds that will be transported across state lines or internationally, to certify they are free of pests and diseases.
• Ensure that your seeds meet labeling requirements that typically include information like the seed type, variety, germination rate, and date of test.
• Stay informed about and comply with the Federal Seed Act and any state seed laws that apply to your business operations.
• Consider obtaining Organic Certification if you plan to sell organic seeds, which requires adherence to specific cultivation standards.

Opening a business bank account and securing funding are crucial steps in establishing a strong financial foundation for your seed business. A separate business account will help you manage finances effectively, while acquiring the necessary funds will enable you to invest in inventory, marketing, and other essential resources. Here's how to approach these tasks:

• Research banks that offer business banking services and compare their account options, fees, and features to find the best fit for your seed business.
• Visit your chosen bank with the necessary documentation, such as your business registration, EIN, and personal identification, to open your business bank account.
• Develop a comprehensive business plan that outlines your financial projections, marketing strategies, and operational costs to present to potential lenders or investors.
• Explore different funding options such as small business loans, grants, crowdfunding, or angel investors, depending on your business needs and eligibility criteria.
• Prepare a compelling pitch if seeking investors, highlighting the unique aspects of your seed business and the potential for growth and profitability.
• Consider applying for a business credit card to separate personal and business expenses, which can also help build your business's credit history.

Setting the right pricing for your seed services is a crucial step in ensuring the viability and success of your seed business. It involves balancing competitiveness with profitability, while also considering the perceived value by your customers. Below are some key points to consider when determining how to price your seed services:

• Cost Analysis: Calculate the total cost of procuring, producing, and packaging your seeds, including overhead costs. Ensure your prices cover these costs and provide a reasonable profit margin.
• Market Research: Study the pricing of similar seed services in the market. Aim to set prices that are competitive but also reflect the quality and uniqueness of your offerings.
• Value-Based Pricing: If your seeds have unique qualities, such as organic certification or rare varieties, consider value-based pricing to reflect their higher worth to customers.
• Volume Discounts: Offer discounts for bulk purchases to attract larger clients, such as commercial growers, while still maintaining profitability.
• Seasonal Adjustments: Be prepared to adjust prices seasonally based on demand and supply fluctuations in the market.
• Legal Compliance: Make sure your pricing strategy complies with all local and national regulations concerning seed sales and trade.

What does it cost to start a Seed business?

Initiating a seed business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $25000 for launching such a seedbusiness. Please note, not all of these costs may be necessary to start up your seed business.

To ensure a successful launch for your seed business, acquiring high-quality equipment and supplies is crucial. This step is about preparing the tools and materials necessary for packaging, storing, and distributing your seeds. Here's a list of essential items you should consider:

• Seed Storage Containers: Airtight and moisture-proof containers to maintain seed viability and prevent deterioration.
• Seed Cleaning Equipment: Tools such as screens, blowers, and separators to clean and process seeds before packaging.
• Packaging Materials: Bags, envelopes, or packets that are labeled with your brand to package seeds for sale.
• Labeling System: A reliable labeling system to provide information about the seed type, planting instructions, and date of packaging.
• Scale: A precise weighing scale for accurate seed measurement and uniform packaging.
• Inventory Management Software: Software to track stock levels, sales, and shipments, ensuring efficient business operations.
• Shipping Supplies: Boxes, padding materials, and postage equipment for safe and professional delivery of your products.
• Marketing Materials: Brochures, business cards, and an online presence to promote your seed offerings to a wider audience.

List of Software, Tools and Supplies Needed to Start a Seed Business:

• Computer hardware and software
• Accounting software
• Point of Sale (POS) system
• Inventory management software
• Packaging materials
• Garden tools
• Seed storage containers
• Shipping supplies
• Marketing materials
• Website or online store platform

Starting a seed business requires careful consideration of the risks involved in the trade. Obtaining the right business insurance is a crucial step to protect your investment and provide peace of mind for you and your customers. Here are some guidelines to help you secure the appropriate insurance for your seed business:

• Identify the types of risks associated with your seed business, such as crop failure, natural disasters, or product liability issues.
• Consult with an insurance agent who has experience in agricultural or small business insurance to get tailored advice for your specific needs.
• Consider purchasing general liability insurance to cover claims related to property damage, bodily injury, and advertising injury that can arise from your business operations.
• Look into product liability insurance, which is particularly important for seed businesses, as it can protect against claims of damage caused by seeds that do not perform as expected.
• Explore business property insurance to protect your inventory, equipment, and other physical assets from theft, fire, or other damages.
• Assess whether you need additional coverage, like business interruption insurance, to help sustain your business if unforeseen events disrupt your operations.
• Make sure to regularly review and update your insurance policies to match the growth and changes in your business.

Starting a seed business requires not only a passion for plants but also a strategic approach to marketing your products. As you reach Step 10, it's time to showcase your seeds to the world and attract gardening enthusiasts to your brand. Here are some essential tips to get the word out and begin marketing your seed services effectively.

• Develop a Strong Brand Identity: Create a memorable logo, slogan, and consistent branding materials that reflect your business's values and mission. This identity should be evident in all your marketing efforts.
• Build a User-Friendly Website: Ensure your website is easy to navigate, mobile-friendly, and includes an e-commerce platform for online sales. Highlight your unique selling propositions and include high-quality images of your seeds and plants.
• Leverage Social Media: Utilize platforms like Instagram, Facebook, and Twitter to connect with your audience. Share engaging content such as planting tips, success stories, and promotions to keep your followers interested and informed.
• Network with Gardening Communities: Attend local gardening events, join online forums, and partner with gardening influencers to increase your visibility within the community.
• Offer Promotions and Discounts: Encourage first-time purchases by providing introductory offers or creating loyalty programs for repeat customers.
• Utilize Content Marketing: Start a blog or a newsletter to share your expertise on seed varieties, planting guides, and care instructions. This can position your business as a knowledgeable authority in the field.

Expanding your seed business requires strategic planning and a keen understanding of your market. As your business grows, focusing on scalability, product diversity, and customer engagement will ensure a smooth transition from a small to a larger enterprise. Here are some effective strategies to consider:

• Explore new markets by researching areas with high demand for seeds and by attending trade shows and agricultural events to network with potential customers.
• Enhance your product line by adding more varieties of seeds, including heirloom species, organic options, or seeds for rare plants to attract a broader customer base.
• Invest in marketing by updating your website, leveraging social media, and employing targeted advertising to reach a wider audience.
• Build partnerships with local nurseries, garden centers, and agricultural schools to establish bulk sales or educational workshops.
• Implement an efficient inventory management system to keep track of stock levels, optimize storage, and ensure timely order fulfillment.
• Offer excellent customer service, including personalized advice, responsive support, and loyalty programs to retain customers and encourage word-of-mouth referrals.
• Consider online sales platforms and e-commerce to tap into the global market and offer your seeds to customers outside your immediate geographical area.

Business Life Cycle Stages: A Short Guide

• 10 May. 2021
• Team @ Moula
• Small Business

Business life cycle stages are a way to analyse how a business changes over time. Understanding where your business sits in the growth stages can help you clarify your thinking and take steps to move through the business lifecycle. Here we describe the stages of a business and how to help you move through them.

Seed stage of the business life cycle

This is the first business life cycle stage when you come up with a business idea and do your research. To start, it’s important to get feedback on the viability of your idea. It could be from family and friends about the products or services you plan to offer. It could be from someone who’s had experience in successfully starting and growing a business. 

You can also use government and private resources to gauge the prospects of your business idea. For example, the Australian Bureau of Statistics produces a range of demographic statistics on the Australian population and their behaviours. IBISWorld has a range of industry reports that detail various industries and their growth prospects. This resource is not free but you might be able to access it online through your local or state library. 

Once you have determined the viability of the business, consider your skills and whether you have what it takes to start and grow the business. Some of these skills include general management, financial management, sales and marketing, communication, delegation, time management and negotiation. If you lack any of these skills, consider how you can improve them or get outside help. 

In order to get ready for the next stage, you will need to determine how much money you need to start and run the business. Many small businesses fail due to a lack of cash early on, so you will want to give some thought to how long it will take for enough income to come in to cover business expenses and make a living. 

A good place to start at this point is by creating a business plan . This document will help you clarify your thinking as you put your ideas on paper.

Start up stage

This is when you put your ideas and research into action. How this happens will depend on the type of business. It’s a crucial stage that will have a big impact on later stages so you will want to think ahead. Questions to ask when starting up are: 

• Will I be able to scale the business in future?
• What business model will be best for achieving business growth?
• When will I be able to step back from running the business?
• How will I be able to sell the business when I want to move on?

While it might seem early to be asking these questions, they are important for determining how you set it up. For example, creating a business that relies on your ongoing presence will limit your future opportunities, including selling the business. 

The start-up stage is a time of trial and error, determining what works and what doesn’t, and changing course to get on the right track to enable growth. 

Growth phase

At this time, you will have worked out the initial challenges and be generating revenue reliably. Typically, cash flow has improved since the start-up stage as cash flow fluctuations are better understood and cash flow management solutions have been implemented. 

You will have new issues to deal with during the growth phase, including hiring the right people for business growth. 

One of the biggest challenges at this time is ensuring that staff and teams work together cohesively to attain business goals. For example, a common sticking point is between sales and marketing and production and fulfilment. While the goal of one team is to maximise sales, the other team has to create and deliver what’s being sold. Poor communication and collaboration in this situation will hinder business growth. 

Other considerations at this stage are dealing with competitors and gaining market share.

Expansion stage in the business life cycle

At this point in the business life cycle, the business has established routines, employees have taken over many tasks once handled by the owner, and an industry presence has been established. Businesses at this stage, often experience rapid growth as they expand into new products or services or markets. While the business is in a position to expand, caution should be taken to avoid growing carelessly or too quickly. At the same time, a lack of growth and change can lead to complacency which often results in decline. 

Business diversification could be an option, but make sure you keep focused on the core business that enabled you to reach this point. Also, be realistic about the return on investment from branching out into new areas.

Business maturity

Typically at this business life cycle stage, business revenue and growth have stabilised. While the business might continue to grow, it’s not at the rapid rates of earlier stages. 

At the maturity stage, business founders are often faced with the choice of further growth or exiting the business. This is a time to ask some questions about the ability to further expand, including:

• Are there realistic opportunities to expand?
• Does the business have the resources to expand?
• Is continued growth sustainable?

New leadership is often brought in at this stage to move the business forward as the entrepreneurial skills needed to start and grow a business are replaced by professional management skills. 

Business exit strategies include having family members take over, management buyout, sale, initial public offering (IPO) or liquidation. Learn more in Business Exit Strategy: How to Prepare to Leave Your Business .

Moving through the business life cycle

Each business is unique and moves through the business life cycle stages at a different rate. Some businesses skip steps entirely, such as fast-growing start-ups that skip the growth phase, go directly to expansion, and then hold a high-profile IPO. But these are rare exceptions. 

For an overview of the business life cycle from a growth perspective, check out Business Growth Stages: Where Is Your Business?

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More From Forbes

Navigating the entrepreneurial ladder: the four stages of successful business evolution.

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Entrepreneur, author, speaker, founder of Adaptively Education and Best in Class Education Center .

Every business begins with an idea—a spark of inspiration—that slowly, through hard work and determination, transforms into something tangible. While it’s tempting to move full steam ahead on a vibrant vision in a race to get to the top, the more important focus should be laying down the crucial foundations that determine the path forward.

According to the Bureau of Labor Statistics , only about a third of businesses operating a decade ago still exist today. This stark reality underscores the importance of strategic planning and adaptability in business. Through my business endeavors and years of mentoring my company’s franchisees, I’ve identified four crucial stages of a business’s evolution: startup, stable, successful and scalable.

Each stage presents excitement and, admittedly, a fair share of challenges. Understanding and navigating these stages thoughtfully and deliberately is essential. By focusing on strong foundations at each stage, we pave the way for reaching the top and ensure we have the structure to stay there.

The four stages of successful business growth

1. startup: planting the seeds, the best self cleaning litter boxes tested for months, aurora alert: why you now need to pack a bag for sudden solar storms, leak reveals an etf perfect storm could be heading toward bitcoin after 6 trillion fed inflation flip unleashed a crypto price boom.

When you first start your business, you wear most or all of the hats. A startup is a spirited adventure driven by innovation, self-belief and the excitement of bringing a new service or product to the market.

It’s essential, however, that drive and determination don’t overshadow the not-so-exciting business tasks that are crucial for establishing the initial groundwork. As you navigate this early phase, you continue developing products or services that meet customer demands, staying mindful of your value proposition—your uniqueness in the market. Understanding where you can position yourself in the market also takes researching the competition. Once you know how to position what you are selling and what message will deliver it, you’re set to accomplish the most important task of a startup: robust customer acquisition to secure cash flow.

Many people fall into the beginner's trap of pouring too much money into pricey marketing campaigns, often increasing their debt without delivering impressive results. Instead of costly advertising, consider engaging with local chambers of commerce, joining networking groups, leveraging social media channels and email campaigns and spreading the word to friends and family about what you're doing and how they can support you. These are cost-effective strategies to kickstart your marketing efforts to serve as many customers as possible.

2. Stability: Establishing your foothold

Transitioning from a startup to a stable business indicates the venture has found its market fit and has begun to generate consistent revenue. Though significant profits may still be out of reach, your company can provide you and a small team with steady pay. The primary objectives for stability are to continue establishing a reliable customer base, pinpoint how to retain and retarget your customers and streamline operations to ensure the business can withstand market fluctuations without financial distress.

At this stage, you can and should start to remove some of the hats you wore during the startup period, build a skilled team to handle critical tasks and develop a positive work culture. Determine the values by which everyone you onboard will operate, ensuring alignment with your business's overall mission and vision. This foundation will help foster a collaborative and productive environment where every team member is empowered to contribute their best.

3. Success: Reaping the rewards

At this point, your business will have grown to accommodate more employees and likely several managers. The brand may have evolved to become somewhat autonomous, operating independently from your daily involvement.

The presence of skilled leaders in key positions means you won't need to supervise every facet of operations. However, the success of this structure hinges not just on hiring managers but on hiring the right managers. It's crucial to recruit individuals who are competent in their roles and embody the entrepreneurial spirit and understanding necessary to drive sales and contribute directly to the company's profitability.

The success stage is about solidifying the gains made, ensuring the business structure supports ongoing success, and preparing strategically for future challenges. By focusing on these areas, you can secure your enterprise's longevity and continued growth.

4. Scaling: Broadening your horizons

Finally, the scaling stage is where your business can experience significant growth through strategic initiatives like mergers, acquisitions and market expansion. Many people are content to stay in the success stage, but for those with a vision to broaden their impact and market reach, scaling offers a pathway to transform a strong business into an industry powerhouse.

This phase requires careful planning and execution to ensure growth does not compromise the quality or the core values that made your business successful in the first place. Franchising is one path to scaling—it’s the road I found to expand my venture and vision, serve more clients and provide entrepreneurial paths for others.

You may find franchising, expanding a single location or growing your online venture to be the right road to scalability. However you move, your company will need a solid framework to handle the increase in operations and potential international ventures. Scaling effectively means leveraging the company’s established reputation and operational strengths to explore new opportunities through duplicable processes.

Each stage is crucial for lasting success

Each stage of business growth presents unique challenges and opportunities. By understanding and mastering these phases, you can strategically guide your business through its lifecycle, adapting strategies to ensure resilience and long-term success. It’s important to remember that this journey is not linear—sometimes, you may need to revisit previous stages to realign your strategies with evolving market conditions and business objectives.

To build a business that endures and excels in a competitive marketplace, embrace each stage fully, commit to continuous learning and proactively drive your company toward a prosperous future. Doing so lays the groundwork for a durable enterprise that stands the test of time.

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• Seed and Series A pitch decks
• Series B pitch decks
• Late-stage funding rounds

See the presentations that hot healthcare startups used to raise millions from top VCs

• Startups have raised billions on the promise of disrupting healthcare.
• To win over investors, startups often present their businesses through a slide deck.
• Here are the presentations obtained by Insider that healthcare startups have used to raise millions.

In the past few years, investors have bet billions on healthcare startups looking to disrupt the industry. 

In 2022, that activity cooled off as the market stumbled and companies postponed their public debuts. The slowdown has persisted into 2023, with funding set to fall to the lowest level since 2019, according to Rock Health .

Winning over investors can be a long process, and it often involves a slide deck that lays out what the startup does, and where the company is heading. 

Insider rounded up all the presentations we've published that healthcare startups have used to raise cash from investors. 

Early on, startups sell investors on often newly tested ideas

When startup founders pitch investors ahead of a seed or Series A round, they haven't gotten far off the ground. 

Presentations can be helpful at laying out the how they plan to take on a particular business.

For instance, a dad used this presentation to raise millions to give kids with ADHD and autism the same kind of therapy that helped his son.

And check out the 13-slide presentation heart-health startup Miga Health used to raise $12 million in seed funding . 

Others can use the presentations to share their new approaches. Here's the presentation the former Louisiana health chief used to raise $15 million for her approach to providing care for families at home .

They can also show how a startup might stand out in a competitive field.  Here's the 12-slide presentation Angle Health, a health-insurance startup, used to land $58 million after its public competitors tumbled . 

And Brightside used this presentation to break through a crowded field of mental health startups and convince VCs to invest $24 million.

In 2023, some startups have raised fresh early-stage funds to back different approaches they're trying. For instance, Inato used this 16-slide presentation to raise $20 million after ditching its old product to solve a $50 billion problem for Big Pharma . 

You can see more presentations below.

See the 10-slide presentation a startup used to land $8 million from General Catalyst to speed up medical research with AI

See the 11-slide presentation a startup used to raise $7 million to help patients find new treatments using AI

See the 10-slide presentation a startup used to raise seed funding for a new approach to obesity treatment

See the 17-slide presentation an AI startup used to raise $15 million to improve post-hospital care

See the presentation a digital-health startup used to raise $30 million to bring mental-health care to college students

See the pitch deck a neurosurgeon used to raise $45 million for a new approach to back pain

See the 19-slide presentation that got General Catalyst to back a startup tackling a $25 billion problem for hospitals

Here's the 15-slide presentation Twentyeight Health used to raise $8.3 million to give Medicaid patients better reproductive healthcare

See the 16-slide presentation a startup used to sell investors on a new approach to solving a $50 billion problem for Big Pharma

See the presentation that got General Catalyst to bet $5 million on Disclo, a startup helping people with disabilities get accommodations at work

See the 14-slide pitch deck Labviva used to raise $20 million to overhaul a crucial but overlooked task for Big Pharma

See the 14-slide presentation StationMD used to raise $3.2 million for its approach to providing care online to people with disabilities

See the presentation that convinced Gwyneth Paltrow and NEA to back digital menopause-care startup Evernow

See the 11-slide presentation that convinced General Catalyst to back a startup building a better system to help insurers track their doctors

See the 15-slide presentation a former Googler used to raise $9 million for his new approach to home care

Here's the 17-slide presentation Circles used to raise $16.5 million for group counseling

Here is the 23-slide presentation a former Marie Claire editor-in-chief used to get millennial men to invest in a startup that treats menopause symptoms

Here is the 29-slide presentation a former Cigna executive used to raise $40 million to improve how lower-income older adults receive healthcare

See the 14-slide presentation a members-only concierge emergency-care startup used to raise $30 million in Series A funding

Related stories

Here is the 12-slide presentation that convinced health-tech juggernauts like Anne Wojcicki and Elad Gil to back a public-health-data analytics startup

See the 16-slide presentation a former Uber exec used to raise $25 million to tackle the growing in-home care market

See the 24-slide presentation the Mint founder used to sell investors and hospitals on his new emergency-room management startup

See the presentation a serial entrepreneur used to raise $20 million from Bessemer and Founders Fund for his solution for Americans living with chronic pain

See the presentation a startup used to raise $3.7 million for an entirely new approach to helping millennials plan for their deaths

By Series B, startups are looking for a chance to grow big

By their Series B rounds, startups are raising higher sums at higher valuations. They're often still early into their existence and are looking for ways to get big. 

Health-data startup Carta Healthcare raised $25 million as it navigates a path to profitability. 

And Devoted Health raised $300 million at a $1.8 billion valuation in 2018 before it had signed on any customers. 

Women's healthcare startup Tia used this 30-slide presentation in 2021 to raise $100 million one year after losing all its revenue 'overnight' because of COVID-19. Tia planned to use the funding to expand its in-person clinics in new locations. 

And even amid the 2022 market downturn, Folx Health raised raise $30 million to provide more telehealth options for LGBTQ+ patients with this 17-slide presentation . 

Tomorrow Health, a home-care startup, used this 12-slide presentation to raise $60 million in Series B funding . It's backed by investors including Andreessen Horowitz. 

Meanwhile tech startup Stellar Health raised $60 million from General Atlantic with this presentation with its approach of rewarding doctors for providing better care. 

See the pitch deck Zus Health used to convince top VCs like Andreessen Horowitz, F-Prime, and Maverick to back its solution for healthcare's $140 billion data-sharing problem

See the 29-slide pitch deck that a digital health startup used to raise $24 million entirely from its hospital customers

See the 15-slide presentation Hint Health used to sell its vision of cutting insurance companies out of primary care

See the 17-slide presentation that convinced Livongo's Glen Tullman to invest in a dermatology startup

Here is the 12-slide presentation two academics used to sell investors on their virtual cognitive-testing startup

Alphabet's VC arm just sank $140 million into a startup that wants to unseat dialysis giants like DaVita. We got the pitch deck that convinced CapitalG to back Strive Health.

Late-stage rounds can give startups the fuel to scale or gear up for a public debut

The presentations used to secure later rounds of funding can be used to show investors how far the startup's come, and what's ahead.

Often, the investors start to look different as well, and startups can find themselves pitching asset managers or industry incumbents, like health insurers. 

For instance, Tiger Global and Blackstone backed decentralized trials startup Medable in its Series D .

Tiger Global — alongside health insurer Humana — also backed the at-home healthcare startup Dispatch Health in its Series D . 

And hot mental-health startup NOCD won over investors including Cigna Ventures in January with this presentation .

The later-stage rounds can signal that a company is on the verge of making a major change. In 2023, 98point6 sold its virtual-care service and raised $30.7 million for its pivot to selling software using this pitch deck . 

Meanwhile, Omada Health used this presentation to raise $192 million as it gears up for an IPO . Digital health startup Tebra similarly used this 23-slide presentation to raise $72 million as it prepares to go public . 

Insurer Centene has backed some later-stage rounds, including Hazel Health's Series C and Vida Health's $110 million round. The upstart shared the presentation that helped it raise the funds toward a new vision for the hardest kind of healthcare.

The presentations at this stage can help land startups like Aledade high valuations. Aledade raised $100 million in a round that valued the company at $2.1 billion .

Sometimes, if the founder is well-known, companies might even get unsolicited funding. This happened to Glen Tullman's new startup Transcarent, which raised a $200 million Series C round that valued the company at $1.62 billion.

Here's the 12-slide presentation that convinced Oak HC/FT and Tiger to bet on a virtual-reality startup to train surgeons

See the 13-slide presentation that convinced Oak HC/FT and NEA to bet on a hot primary-care startup

Here's the 11-slide presentation digital-health startup Podimetrics used to land $45 million for its remote-monitoring tech

See the 14-slide presentation that convinced ICONIQ and Sequoia to lead a $140 million investment in a startup focused on treating metabolic conditions

This pitch deck helped telehealth startup Heal raise $100 million and win a major partnership with healthcare giant Humana. Here's how the deal came to be.

Watch: The CEO of one of the largest health insurers in the US explains the problem with healthcare in America

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MSI 2024 playoffs: Bracket stage schedule, results, where to watch

It’s time to bring out the heaviest artillery.

Updated on May 18, 8:58 p.m. (GMT+8): Updated scores and schedule.

Updated on May 9, 11:17 p.m. (GMT+8): Clarified terminology of brackets.

The dust has settled after the conclusion of the Play-In Stage. The best League of Legends teams from around the globe are primed to clash in the high-stakes, double-elimination bracket at the MSI 2024 playoffs.

From May 7 to 19, the top seeds from LCK, LPL, LEC, and LCS will join four Play-In victors in a brutal battle for the coveted MSI trophy.

The stakes have never been higher at the Mid-Season Invitational — the winner secures a coveted spot at Worlds while the runner-up’s region gains an additional seed.

This article details the MSI 2024 playoffs format, structure, and path to victory that awaits these elite squads. Time to buckle up!

MSI 2024 playoffs dates

The Bracket Stage draw results can be viewed here.

MSI 2024 playoffs schedule and results

May 7 (Tuesday) — Quarterfinals

Top Esports advances to the upper bracket semifinals.

Team Liquid drops to lower bracket round one.

May 8 (Wednesday) — Quarterfinals

Gen.G advances to the upper bracket semifinals to face Top Esports.

Fnatic drops to lower bracket round one against Team Liquid.

May 9 (Thursday) — Quarterfinals

Bilibili Gaming advances to the upper bracket semifinals.

PSG Talon drops to lower bracket round one.

May 10 (Friday) — Quarterfinals

Read our full recap of the G2 versus T1 match here. T1 advances to the upper bracket semifinal to face Bilibili Gaming.

G2 Esports drops to lower bracket round one against PSG Talon.

May 11 (Saturday) — Lower bracket round one and Upper bracket semifinals

Fnatic is eliminated. Team Liquid advances to lower bracket round two.

Gen.G advances to the upper bracket final. Top Esports drops to lower bracket round two.

May 12 (Sunday) — Lower bracket round one and Upper bracket semifinals

G2 Esports advances to lower bracket round two to face Top Esports. PSG Talon is eliminated.

Bilibili Gaming advances to the upper bracket final against Gen.G. T1 drops to lower bracket round two to face Team Liquid.

May 14 (Tuesday) — Lower bracket round 2

G2 Esports advances to lower bracket round three to face the winner of T1 and Team Liquid’s lower bracket round two match.

Top Esports is eliminated.

May 15 (Wednesday) — Lower bracket round 2

T1 advances to lower bracket round three to face G2 Esports for a second time this tournament.

Team Liquid is eliminated.

May 16 (Thursday) — Upper bracket final

Gen.G advances to the Grand Finals.

Bilibili Gaming drops to the lower bracket final and will face the winner of T1 and G2 Esports’ lower bracket round 3 match.

Gen.G’s Jeong “Chovy” Ji-hoon shares his thoughts on the BLG series here.

May 17 (Friday) — Lower bracket round 3

T1 advance to the lower bracket final to face Bilibili Gaming. Faker shares his post-game thoughts here.

G2 Esports is eliminated. Read our full recap of the T1 versus G2 rematch here.

May 18 (Saturday) — Lower bracket final

Bilibili Gaming advances to the grand finals to face Gen.G for a second time.

T1 is eliminated.

May 19 (Sunday) — Grand finals

Teams qualified for MSI 2024 Bracket Stage

Where to watch MSI

Boasting higher stakes than ever before, the mid-year tournament is an exciting event for League of Legends esports fans. Watch it live on Riot Games’ official  Twitch  and  YouTube  channels.

READ MORE:  How to change League of Legends name — the easiest way to switch it up

Sign up for a free ONE Esports account and start engaging with other fans!

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BeyondSpring R&D Day Highlights New Plinabulin Development Strategy for Cancer and Updates for SEED Therapeutics

FLORHAM PARK, N.J., May 16, 2024 (GLOBE NEWSWIRE) -- BeyondSpring Inc. (NASDAQ: BYSI) (“BeyondSpring” or the “Company”), a clinical-stage global biopharmaceutical company focused on developing innovative cancer therapies, today announced that it hosted a virtual Research and Development (R&D) Day to discuss its lead asset Plinabulin, a dendritic cell (DC) maturation agent, in drug combinations to potentially address the current unmet medical needs in cancer indications where patients failed prior PD-1/PD-L1 inhibitors, as well as updates for SEED Therapeutics which focuses on target protein degradation (TPD) platform for innovative molecular glue drug discovery on May 15, 2024.

The R&D Day was led by Key Opinion Leaders (KOLs) Trevor M. Feinstein, M.D. (Piedmont Cancer Institute), Alberto Chiappori, M.D. (Moffitt Cancer Center), and Steven Lin, M.D., Ph.D. (MD Anderson Cancer Center), as well as BeyondSpring and SEED Therapeutics management.

Invited KOLs shared their latest insights on plinabulin’s durable anti-cancer benefit, mechanism-of-action (MOA), and its unique potential as an I/O combination agent with chemotherapy or radiation, in patients that have progressed on PD-1/PD-L1 therapy. Over time, plinabulin may have the potential to move into earlier lines of treatment in combination with I/O:

• As a unique tubulin binder, plinabulin drives dendritic cell (DC) maturation/T-cell activation by effectively liberating the immune defense protein GEF-H1 from microtubules.
• In a phase 3 study with EGFR wild-type 2L/3L NSCLC, the combination of plinabulin and docetaxel significantly extended OS in all subgroup analyses and doubled 2-year and 3-year OS rates compared to docetaxel alone.
• In an MD Anderson phase 1 study, in combination with radiotherapy and a PD-1 inhibitor, plinabulin demonstrated its DC maturation MOA in responding patients (PR+SD) in multiple cancers that had progressed during PD-1/PD-L1 inhibitor therapy with >50% disease control rate (PR+SD). The most responding cancers include NSCLC, HNSCC and Hodgkin’s lymphoma.
• Plinabulin’s potent DC maturation effect, in combination with PD-1/PD-L1 and radiation or chemotherapy, may address unmet medical needs across numerous patient settings following progression from PD-1/PD-L1 inhibitor therapy.
• Plinabulin has the potential to fill a substantial gap in cancer treatment for precisely the same patient settings that have been found elusive to other mechanisms or combinations.

“Additionally, significant headway is being made through various Investigator-Initiated Trial (IIT) studies of plinabulin at leading institutions in the U.S. and China. Preliminary results are expected to be reported in 2H 2024, that are expected to reinforce our unique MOA and lead to a transformative year for BeyondSpring. If interim clinical data from our ongoing studies further validates our unique MOA, then we will look for opportunities to extend and accelerate plinabulin’s outreach through third-party partnerships,” said Dr. Lan Huang, Co-Founder, Chairman and CEO of BeyondSpring.

Following the plinabulin presentations, Dr. Lan Huang discussed how BeyondSpring’s majority-owned subsidiary, SEED Therapeutics, uses its proprietary TPD platforms to develop “molecular glues” for undruggable targets. Different from PROTAC platforms, molecular glues have the potential advantage of targeting un-ligandable proteins, including proteins without ligandable pocket, and unfolded protein, such as Tau. The SEED TPD platform referred to as RITE3, has translated the scientific breakthroughs and insights of its co-founders, including a Nobel Laureate and two Howard Hughes Medical Institute investigators, into a diversified and fast-evolving drug development pipeline:

• Differentiated from other molecular glue companies, which are mainly “E3 centric”, SEED’s RITE3 platform is “target centric” and uses novel E3 ligases for protein targets. With detectable weak basal interaction between selected E3 and protein target, the binder hit rates from its high throughput screening is higher.
• 6 internal pipeline assets and 2 partnered assets, in oncology, neurodegeneration, immunology, and virology used 5 novel E3 ligases.
• SEED expects to file an IND in early 2025 for its IND Candidate oral RBM39 degrader, for the treatment of rationally selected cancer indications.
• SEED R&D has a focus on the development of orally delivered molecular glues for CNS indications, with a lead internal program against Tau.

Eli Lilly is a current investor and R&D collaborator with upfront and milestone payments up to $780 million, plus tiered royalties. SEED has achieved 3 milestones with Lilly R&D collaboration.

“I'm delighted to announce SEED's substantial progress in advancing internal initiatives, including an oncology asset advancing towards first human dose in the first half of 2025, Tau degraders for neurodegeneration advancing towards lead molecule status towards the end of 2024. In addition, we have a synergistic collaboration with Eli Lilly, which achieved multiple milestone payments. In the recent “Nature Biotechnology” review article on molecular glues, it was truly a privilege for SEED Therapeutics to be recognized alongside other prominent companies employing groundbreaking TPD molecular glue strategies. Leveraging our unique and proprietary RITE3 platform that focuses on predicting, detecting, and utilizing a pre-existing weak interaction between an E3 ligase and the target disease-causing protein, SEED consistently garners growing interest for additional partnerships and investment,” said Dr. James Tonra, President and CSO of SEED Therapeutics.

An archived replay of the webinar will be available on BeyondSpring’s website www.beyondspringpharma.com under “Events and Presentations” in the Investors section.

Trevor M. Feinstein, M.D. Dr. Feinstein is board certified in medical oncology and hematology. He joined Piedmont Cancer Institute in 2011 and is the Director of Research at Piedmont Fayette Hospital. Dr. Feinstein is actively involved in clinical trials focused on improved therapies for various cancers. He is a member of Georgia CORE’s research committee along with Georgia Society for Clinical Oncology Clinical Practice Committee. He also chairs the Lung Disease Group for the entire OneOncology network. He is a co-investigator on several peer-reviewed research projects and has authored numerous publications and abstracts in Hematology and Oncology. Dr. Feinstein graduated from the University of Illinois medical school and completed his residence and fellowships at the University of Pittsburgh.

Alberto Chiappori, M.D. Dr. Chiappori is board certified in medical oncology. He serves as senior member of oncology and medicine for the Thoracic Oncology Program at the H. Lee Moffitt Cancer Center and Research Institute in Tampa and Florida. Dr. Chiappori is an active member of the American Society of Clinical Oncology, the European Society of Medical Oncology, the American Association for Cancer Research, and the International Association for the Study of Lung Cancer (IASLC). Dr. Chiappori received his M.D. from the Universidad Peruana Cayetano Heredia in Lima, Peru, completed his residency at Southern Illinois University School of Medicine in Springfield, Illinois, and finished his fellowship and senior fellowship in medical oncology-hematology at Vanderbilt University School of Medicine in Nashville, Tennessee.

Steven Lin, M.D., Ph.D. Dr. Lin is a Professor and Physician-Scientist at MD Anderson Cancer Center, with joint appointments in the Departments of Radiation Oncology and Experimental Radiation Oncology. Dr. Lin’s practice focuses on thoracic malignancies, and he oversees several clinical trials including the use of proton beam therapy for esophageal cancer and in the combination of immunotherapy with radiotherapy in lung and esophageal cancers. Dr. Lin runs a translational research team that evaluates biomarkers for treatment response and disease outcomes after cancer therapy. Dr. Lin acquired his M.D. and Ph.D. in the Medical Scientist Training Program at the University of California Irvine Medical School. He went on for residency training in Radiation Oncology at The Johns Hopkins Hospital.

About BeyondSpring BeyondSpring is a global clinical-stage biopharmaceutical company focused on developing innovative therapies to improve clinical outcomes for patients with high unmet medical needs. The Company is advancing its first-in-class lead asset, Plinabulin, as a direct anti-cancer agent in various cancer indications and to prevent chemotherapy-induced neutropenia. BeyondSpring’s pipeline also includes three preclinical immuno-oncology assets. Additionally, BeyondSpring’s subsidiary, SEED Therapeutics, leverages a proprietary TPD drug discovery platform and has an initial R&D collaboration with Eli Lilly. Learn more by visiting https://beyondspringpharma.com .

About SEED Therapeutics SEED Therapeutics is an innovative biotech company focusing on harnessing and engineering “molecular glues” and targeted protein degradation (TPD) to attack previously undruggable targets. Backed by a comprehensive intellectual property portfolio, SEED Therapeutics' mission is to positively impact human health by creating novel protein degradation therapeutics to treat various severe diseases that currently have limited treatment options for patients and their families. Through ongoing collaborations with world-leading academic experts in the field, SEED Therapeutics is developing a growing pipeline of novel drug candidates on a path to potential clinical and commercial success. SEED has an initial R&D collaboration and investment from Eli Lilly and Company. Learn more by visiting https://seedtherapeutics.com/.

Cautionary Note Regarding Forward-Looking Statements This press release includes forward-looking statements that are not historical facts. Words such as “will,” “expect,” “anticipate,” “plan,” “believe,” “design,” “may,” “future,” “estimate,” “predict,” “objective,” “goal,” or variations thereof and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are based on BeyondSpring’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties, and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, our ability to continue as a going concern, difficulties raising the anticipated amount needed to finance the Company’s future operations on terms acceptable to the Company, if at all, unexpected results of clinical trials, delays or denial in regulatory approval process, results that do not meet the Company’s expectations regarding the potential safety, the ultimate efficacy or clinical utility of the Company’s product candidates, increased competition in the market, the Company’s ability to meet Nasdaq's continued listing requirements, and other risks described in BeyondSpring’s most recent Form 20-F on file with the U.S. Securities and Exchange Commission. All forward-looking statements made herein speak only as of the date of this release and BeyondSpring undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.

Investor Contact: [email protected]

Media Contact: [email protected]

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Lateral Partner Integration Requires Business Development Plan

When a lateral is hired into a new firm, following the tone set during the recruiting process is essential. The firm needs to ensure the lateral is set up for success on day one. Openness, honesty, and transparency are key.

A 12-month marketing and business development plan should be created as a roadmap for integrating new lateral hires and partnering them with a business development liaison. The assigned liaison should host regular check-in calls and serve as the lateral’s initial point of contact for all client development activities.

Setting the Stage

An introductory call between the lateral and their assigned BD liaison should take place prior to their start date or within the first two weeks. This should be the first in a series of integration meetings that take place during the lateral’s first year.

The goal of the meeting is to help the lateral understand the resources of the firm, services the marketing and BD department provides (i.e., requests for proposals, pitches, collateral, conference/speaking engagement prep, awards & rankings, bio updates, etc.) and to answer firm questions that may not have been addressed during the recruiting process.

The lateral and liaison should discuss any immediate client needs/opportunities, expectations, what support the lateral needs, and alert clients about the move.

The lateral should walk away from the meeting feeling confident, comfortable, and with a clear path forward.

Read more: Lateral Partner Recruiting Must Focus on Honesty and Clear Data

Introduction and Implementation

The BD liaison must also obtain a fulsome knowledge of the lateral’s practice, portable book of business, client targets, and preferred marketing styles. They should ascertain the partner’s strengths and weaknesses, as well as business goals and objectives.

The liaison needs to know why the lateral was hired—their niche expertise, specific client needs, and regional presence—to help identify cross-sell opportunities, make appropriate introductions to targeted attorneys within the firm, and plug the lateral into pre-existing client and industry teams. Prioritization should be placed on client-facing activities and the lawyer’s strengths.

The new partner’s BD liaison should have the same information as the legal recruiting team, which includes the lateral’s resume, partner questionnaire, offer letter, and revenue goals. Armed with these resources, the business development liaison is positioned as a part of the firm’s long time revenue strategy for the lateral partner, versus as a document producer.

Positioning the BD liaison as a key to the lateral’s success at the onset will encourage the partner to engage them in a meaningful way with strategy, innovation, and revenue generating activities for a sustaining practice. This allows the partner to focus on delivering quality legal services, while the BD liaison can focus on collaboratively growing their book of business.

Having a thoughtful, written integration plan is imperative. A written process ensures not only accountability, but gives each lateral the same onboarding experience regardless of which practice group or industry team they sit in.

During each meeting, the liaison should probe the lateral on topics such as satisfaction with the firm, sense of being valued, client growth opportunities, bandwidth and utilization, and cross-selling successes or frustrations. Regular status updates should be provided to firm leadership and other stakeholders. If the lateral flags an issue or perceived roadblock, the liaison should dig deeper to understand the root cause, and work with leadership to course correct.

It’s critical that firms not overpromise and underdeliver. For example, a lateral may have been hired to inherit a portfolio that fell through, or perhaps market fluctuations prohibited the opening of a new office that the lateral was intended to join. It’s important to keep the lateral’s business development liaison informed of these developments so they can monitor follow-though, manage expectations, and help pivot if necessary.

The firm should be clear about their commitments. Conversely, expectations for new partners’ client development and relationship building activities, for example, should also be addressed directly.

The most successful laterals are engaged and actively participate in regular integration calls. Holding 90-day reviews that include members of the recruiting team and practice group or department leaders can provide an opportunity for the partner to be heard as well as to receive direct feedback.

Integration Process

Avoid letting new lateral partners fall between the cracks, especially if they’re rainmakers or inexperienced business developers, by having a continuity plan that includes the written integration process. The BD liaisons shouldn’t work in silos.

Find a collaboration tool that works for the team’s communication style and commit to using it. Keep detailed records and have a plan of continued support should the assigned BD liaison leave the firm, or if there is significant recent or impending change happening within the firm, such as a merger or acquisition.

Recruiting and integration don’t cease when a merger is on the horizon, and the potential for new laterals to get lost in transition during a major change increases. Firms must adapt their recruiting and integration strategies not only to speak to the newly merged firm’s emerging cultural differentiators but also to how laterals will be supported in a fluid environment.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Brian J. Carrozza is director of client development at Goulston & Storrs.

Courtney C. Hudson is business development manager at Baker, Donelson, Bearman, Caldwell & Berkowitz.

Megan K. Senese is co-founder and principal at stage, a women-owned business development and legal marketing firm.

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To contact the editors responsible for this story: Jada Chin at [email protected] ; Jessie Kokrda Kamens at [email protected]

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The Possible Collapse of the U.S. Home Insurance System

A times investigation found climate change may now be a concern for every homeowner in the country..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From “The New York Times,” I’m Sabrina Tavernise. And this is “The Daily.”

[MUSIC PLAYING]

Today, my colleague, Christopher Flavelle, on a “Times” investigation into one of the least known and most consequential effects of climate change — insurance — and why it may now be a concern for every homeowner in the country.

It’s Wednesday, May 15.

So, Chris, you and I talked a while ago about how climate change was really wreaking havoc in the insurance market in Florida. You’ve just done an investigation that takes a look into the insurance markets more broadly and more deeply. Tell us about it.

Yeah, so I cover climate change, in particular the way climate shocks affect different parts of American life. And insurance has become a really big part of that coverage. And Florida is a great example. As hurricanes have gotten worse and more frequent, insurers are paying out more and more money to rebuild people’s homes. And that’s driving up insurance costs and ultimately driving up the cost of owning a home in Florida.

So we’re already seeing that climate impact on the housing market in Florida. My colleagues and I started to think, well, could it be that that kind of disruption is also happening in other states, not just in the obvious coastal states but maybe even through the middle of the US? So we set out to find out just how much it is happening, how much that Florida turmoil has, in fact, become really a contagion that is spreading across the country.

So how did you go about reporting this? I mean, where did you start?

All we knew at the start of this was that there was reason to think this might be a problem. If you just look at how the federal government tracks disasters around the country, there’s been a big increase almost every year in the number and severity of all kinds of disasters around the country. So we thought, OK, it’s worth trying to find out, what does that mean for insurers?

The problem is getting data on the insurance industry is actually really hard. There’s no federal regulation. There’s no government agency you can go to that holds this data. If you talk to the insurers directly, they tend to be a little reluctant to share information about what they’re going through. So we weren’t sure where to go until, finally, we realized the best people to ask are the people whose job it is to gauge the financial health of insurance companies.

Those are rating agencies. In particular, there’s one rating company called AM Best, whose whole purpose is to tell investors how healthy an insurance company is.

Whoa. So this is way down in the nuts and bolts of the US insurance industry.

Right. This is a part of the broader economy that most people would never experience. But we asked them to do something special for us. We said, hey, can you help us find the one number that would tell us reporters just how healthy or unhealthy this insurance market is state by state over time? And it turns out, there is just such a number. It’s called a combined ratio.

OK, plain English?

Plain English, it is the ratio of revenue to costs, how much money these guys take in for homeowner’s insurance and how much they pay out in costs and losses. You want your revenue to be higher than your costs. If not, you’re in trouble.

So what did you find out?

Well, we got that number for every state, going back more than a decade. And what it showed us was our suspicions were right. This market turmoil that we were seeing in Florida and California has indeed been spreading across the country. And in fact, it turns out that in 18 states, last year, the homeowner’s insurance market lost money. And that’s a big jump from 5 or 10 years ago and spells real trouble for insurance and for homeowners and for almost every part of the economy.

So the contagion was real.

Right. This is our first window showing us just how far that contagion had spread. And one of the really striking things about this data was it showed the contagion had spread to places that I wouldn’t have thought of as especially prone to climate shocks — for example, a lot of the Midwest, a lot of the Southeast. In fact, if you think of a map of the country, there was no state between Pennsylvania and the Dakotas that didn’t lose money on homeowner’s insurance last year.

So just huge parts of the middle of the US have become unprofitable for homeowner’s insurance. This market is starting to buckle under the cost of climate change.

And this is all happening really fast. When we did the Florida episode two years ago, it was a completely new phenomenon and really only in Florida. And now it’s everywhere.

Yeah. And that’s exactly what’s so striking here. The rate at which this is becoming, again, a contagion and spreading across the country is just demolishing the expectations of anyone I’ve spoken to. No one thought that this problem would affect so much of the US so quickly.

So in these states, these new places that the contagion has spread to, what exactly is happening that’s causing the insurance companies to fold up shop?

Yeah. Something really particular is happening in a lot of these states. And it’s worth noting how it’s surprised everyone. And what that is, is formally unimportant weather events, like hailstorms or windstorms, those didn’t used to be the kind of thing that would scare insurance companies. Obviously, a big problem if it destroys your home or damages your home. But for insurers, it wasn’t going to wipe them out financially.

Right. It wasn’t just a complete and utter wipeout that the company would then have to pony up a lot of money for.

Exactly. And insurers call them secondary perils, sort of a belittling term, something other than a big deal, like a hurricane.

These minor league weather events.

Right. But those are becoming so frequent and so much more intense that they can cause existential threats for insurance companies. And insurers are now fleeing states not because of hurricanes but because those former things that were small are now big. Hailstorms, wildfires in some places, previous annoyances are becoming real threats to insurers.

Chris, what’s the big picture on what insurers are actually facing? What’s happening out there numbers-wise?

This is a huge threat. In terms of the number of states where this industry is losing money, it’s more than doubled from 10 years ago to basically a third of the country. The amount they’re losing is enormous. In some states, insurers are paying out $1.25 or even $1.50 for every dollar they bring in, in revenue, which is totally unsustainable.

And the result is insurers are making changes. They are pulling back from these markets. They’re hiking premiums. And often, they’re just dropping customers. And that’s where this becomes real, not just for people who surf balance sheets and trade in the stock market. This is becoming real for homeowners around the country, who all of a sudden increasingly can’t get insurance.

So, Chris, what’s the actual implication? I mean, what happens when people in a state can’t get insurance for their homes?

Getting insurance for a home is crucial if you want to sell or buy a home. Most people can’t buy a home without a mortgage. And banks won’t issue a mortgage without home insurance. So if you’ve got a home that insurance company doesn’t want to cover, you got a real problem. You need to find insurance, or that home becomes very close to unsellable.

And as you get fewer buyers, the price goes down. So this doesn’t just hurt people who are paying for these insurance premiums. It hurts people who want to sell their homes. It even could hurt, at some point, whole local economies. If home values fall, governments take in less tax revenue. That means less money for schools and police. It also means people who get hit by disasters and have to rebuild their homes all of a sudden can’t, because their insurance isn’t available anymore. It’s hard to overstate just how big a deal this is.

And is that actually happening, Chris? I mean, are housing markets being dragged down because of this problem with the insurance markets right now?

Anecdotally, we’ve got reports that in places like Florida and Louisiana and maybe in parts of California, the difficulty of getting insurance, the crazy high cost of insurance is starting to depress demand because not everyone can afford to pay these really high costs, even if they have insurance. But what we wanted to focus on with this story was also, OK, we know where this goes eventually. But where is it beginning? What are the places that are just starting to feel these shocks from the insurance market?

And so I called around and asked insurance agents, who are the front lines of this. They’re the ones who are struggling to find insurance for homeowners. And I said, hey, is there one place that I should go if I want to understand what it looks like to homeowners when all of a sudden insurance becomes really expensive or you can’t even find it? And those insurance agents told me, if you want to see what this looks like in real life, go to a little town called Marshalltown in the middle of Iowa.

We’ll be right back.

So, Chris, you went to Marshalltown, Iowa. What did you find?

Even before I got to Marshalltown, I had some idea I was in the right spot. When I landed in Des Moines and went to rent a car, the nice woman at the desk who rented me a car, she said, what are you doing here? I said, I’m here to write a story about people in Iowa who can’t get insurance because of storms. She said, oh, yeah, I know all about that. That’s a big problem here.

Even the rental car lady.

Even the rental car lady knew something was going on. And so I got into my rental car and drove about an hour northeast of Des Moines, through some rolling hills, to this lovely little town of Marshalltown. Marshalltown is a really cute, little Midwestern town with old homes and a beautiful courthouse in the town square. And when I drove through, I couldn’t help noticing all the roofs looked new.

What does that tell you?

Turns out Marshalltown, despite being a pastoral image of Midwestern easy living, was hit by two really bad disasters in recent years — first, a devastating tornado in 2018 and then, in 2020, what’s called a derecho, a straight-line wind event that’s also just enormously damaging. And the result was lots of homes in this small town got severely damaged in a short period of time. And so when you drive down, you see all these new roofs that give you the sense that something’s going on.

So climate had come to Marshalltown?

Exactly. A place that had previously seemed maybe safe from climate change, if there is such a thing, all of a sudden was not. So I found an insurance agent in Marshalltown —

We talked to other agents but haven’t talked to many homeowners.

— named Bobby Shomo. And he invited me to his office early one morning and said, come meet some people. And so I parked on a quiet street outside of his office, across the street from the courthouse, which also had a new roof, and went into his conference room and met a procession of clients who all had versions of the same horror story.

It was more — well more of double.

A huge reduction in coverage with a huge price increase.

Some people had faced big premium hikes.

I’m just a little, small business owner. So every little bit I do feel.

They had so much trouble with their insurance company.

I was with IMT Insurance forever. And then when I moved in 2020, Bobby said they won’t insure a pool.

Some people had gotten dropped.

Where we used to see carriers canceling someone for frequency of three or four or five claims, it’s one or two now.

Some people couldn’t get the coverage they needed. But it was versions of the same tale, which is all of a sudden, having homeowner’s insurance in Marshalltown was really difficult. But I wanted to see if it was bigger than just Marshalltown. So the next day, I got back in my car and drove east to Cedar Rapids, where I met another person having a version of the same problem, a guy named Dave Langston.

Tell me about Dave.

Dave lives in a handsome, modest, little townhouse on a quiet cul-de-sac on a hill at the edge of Cedar Rapids. He’s the president of his homeowners association. There’s 17 homes on this little street. And this is just as far as you could get from a danger zone. It looks as safe as could be. But in January, they got a letter from the company that insures him and his neighbors, saying his policy was being canceled, even though it wasn’t as though they’d just been hit by some giant storm.

So then what was the reason they gave?

They didn’t give a reason. And I think people might not realize, insurers don’t have to give a reason. Insurance policies are year to year. And if your insurance company decides that you’re too much of a risk or your neighborhood is too much of a risk or your state is too much of a risk, they can just leave. They can send you a letter saying, forget it. We’re canceling your insurance. There’s almost no protection people have.

And in this case, the reason was that this insurance company was losing too much money in Iowa and didn’t want to keep on writing homeowner’s insurance in the state. That was the situation that Dave shared with tens of thousands of people across the state that were all getting similar letters.

What made Dave’s situation a little more challenging was that he couldn’t get new insurance. He tried for months through agent after agent after agent. And every company told him the same thing. We won’t cover you. Even though these homes are perfectly safe in a safe part of the state, nobody would say yes. And it took them until basically two days before their insurance policy was going to run out until they finally found new coverage that was far more expensive and far more bare-bones than what they’d had.

But at least it was something.

It was something. But the problem was it wasn’t that good. Under this new policy, if Dave’s street got hit by another big windstorm, the damage from that storm and fixing that damage would wipe out all the savings set aside by these homeowners. The deductible would be crushingly high — $120,000 — to replace those roofs if the worst happened because the insurance money just wouldn’t cover anywhere close to the cost of rebuilding.

He said to me, we didn’t do anything wrong. This is just what insurance looks like today. And today, it’s us in Cedar Rapids. Everyone, though, is going to face a situation like this eventually. And Dave is right. I talked to insurance agents around the country. And they confirmed for me that this kind of a shift towards a new type of insurance, insurance that’s more expensive and doesn’t cover as much and makes it harder to rebuild after a big disaster, it’s becoming more and more common around the country.

So, Chris, if Dave and the people you spoke to in Iowa were really evidence that your hunch was right, that the problem is spreading and rapidly, what are the possible fixes here?

The fix that people seem most hopeful about is this idea that, what if you could reduce the risk and cause there to be less damage in the first place? So what some states are doing is they’re trying to encourage homeowners to spend more money on hardening their home or adding a new roof or, if it’s a wildfire zone, cut back the vegetation, things that can reduce your risk of having really serious losses. And to help pay for that, they’re telling insurers, you’ve got to offer a discount to people who do that.

And everyone who works in this field says, in theory, that’s the right approach. The problem is, number one, hardening a home costs a fantastic amount of money. So doing this at scale is hugely expensive. Number two, it takes a long time to actually get enough homes hardened in this way that you can make a real dent for insurance companies. We’re talking about years or probably decades before that has a real effect, if it ever works.

OK. So that sounds not particularly realistic, given the urgency and the timeline we’re on here. So what else are people looking at?

Option number two is the government gets involved. And instead of most Americans buying home insurance from a private company, they start buying it from government programs that are designed to make sure that people, even in risky places, can still buy insurance. That would be just a gargantuan undertaking. The idea of the government providing homeowner’s insurance because private companies can’t or won’t would lead to one of the biggest government programs that exists, if we could even do it.

So huge change, like the federal government actually trying to write these markets by itself by providing homeowner’s insurance. But is that really feasible?

Well, in some areas, we’re actually already doing it. The government already provides flood insurance because for decades, most private insurers have not wanted to cover flood. It’s too risky. It’s too expensive. But that change, with governments taking over that role, creates a new problem of its own because the government providing flood insurance that you otherwise couldn’t get means people have been building and building in flood-prone areas because they know they can get that guaranteed flood insurance.

Interesting. So that’s a huge new downside. The government would be incentivizing people to move to places that they shouldn’t be.

That’s right. But there’s even one more problem with that approach of using the government to try to solve this problem, which is these costs keep growing. The number of billion-dollar disasters the US experiences every year keeps going up. And at some point, even if the government pays the cost through some sort of subsidized insurance, what happens when that cost is so great that we can no longer afford to pay it? That’s the really hard question that no official can answer.

So that’s pretty doomsday, Chris. Are we looking at the end of insurance?

I think it’s fair to say that we’re looking at the end of insurance as we know it, the end of insurance that means most Americans can rest assured that if they get hit by a disaster, their insurance company will provide enough money they can rebuild. That idea might be going away. And what it shows is maybe the threat of climate change isn’t quite what we thought.

Maybe instead of climate change wrecking communities in the form of a big storm or a wildfire or a flood, maybe even before those things happen, climate change can wreck communities by something as seemingly mundane and even boring as insurance. Maybe the harbinger of doom is not a giant storm but an anodyne letter from your insurance company, saying, we’re sorry to inform you we can no longer cover your home.

Maybe the future of climate change is best seen not by poring over weather data from NOAA but by poring over spreadsheets from rating firms, showing the profitability from insurance companies, and how bit by bit, that money that they’re losing around the country tells its own story. And the story is these shocks are actually already here.

Chris, as always, terrifying to talk to you.

Always a pleasure, Sabrina.

Here’s what else you should know today. On Tuesday, the United Nations has reclassified the number of women and children killed in Gaza, saying that it does not have enough identifying information to know exactly how many of the total dead are women and children. The UN now estimates that about 5,000 women and about 8,000 children have been killed, figures that are about half of what it was previously citing. The UN says the numbers dropped because it is using a more conservative estimate while waiting for information on about 10,000 other dead Gazans who have not yet been identified.

And Mike Johnson, the Speaker of the House, gave a press conference outside the court in Lower Manhattan, where Michael Cohen, the former fixer for Donald Trump, was testifying for a second day, answering questions from Trump’s lawyers. Trump is bound by a gag order. So Johnson joined other stand-ins for the former president to discredit the proceedings. Johnson, one of the most important Republicans in the country, attacked Cohen but also the trial itself, calling it a sham and political theater.

Today’s episode was produced by Nina Feldman, Shannon Lin, and Jessica Cheung. It was edited by MJ Davis Lin, with help from Michael Benoist, contains original music by Dan Powell, Marion Lozano, and Rowan Niemisto, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for “The Daily.” I’m Sabrina Tavernise. See you tomorrow.

• May 17, 2024   •   51:10 The Campus Protesters Explain Themselves
• May 16, 2024   •   30:47 The Make-or-Break Testimony of Michael Cohen
• May 15, 2024   •   27:03 The Possible Collapse of the U.S. Home Insurance System
• May 14, 2024   •   35:20 Voters Want Change. In Our Poll, They See It in Trump.
• May 13, 2024   •   27:46 How Biden Adopted Trump’s Trade War With China
• May 10, 2024   •   27:42 Stormy Daniels Takes the Stand
• May 9, 2024   •   34:42 One Strongman, One Billion Voters, and the Future of India
• May 8, 2024   •   28:28 A Plan to Remake the Middle East
• May 7, 2024   •   27:43 How Changing Ocean Temperatures Could Upend Life on Earth
• May 6, 2024   •   29:23 R.F.K. Jr.’s Battle to Get on the Ballot
• May 3, 2024   •   25:33 The Protesters and the President
• May 2, 2024   •   29:13 Biden Loosens Up on Weed

Hosted by Sabrina Tavernise

Featuring Christopher Flavelle

Produced by Nina Feldman ,  Shannon M. Lin and Jessica Cheung

Edited by MJ Davis Lin

With Michael Benoist

Original music by Dan Powell ,  Marion Lozano and Rowan Niemisto

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music | YouTube

Across the United States, more frequent extreme weather is starting to cause the home insurance market to buckle, even for those who have paid their premiums dutifully year after year.

Christopher Flavelle, a climate reporter, discusses a Times investigation into one of the most consequential effects of the changes.

On today’s episode

Christopher Flavelle , a climate change reporter for The New York Times.

Background reading

As American insurers bleed cash from climate shocks , homeowners lose.

See how the home insurance crunch affects the market in each state .

Here are four takeaways from The Times’s investigation.

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

Christopher Flavelle contributed reporting.

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Dan Farrell, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Renan Borelli, Maddy Masiello, Isabella Anderson and Nina Lassam.

Christopher Flavelle is a Times reporter who writes about how the United States is trying to adapt to the effects of climate change. More about Christopher Flavelle

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