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How is Seed Funding different from growth-stage funding?
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What are the challenges faced by Seed-stage startups?
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Product/Service: The product developed by the startup is in the idea validation stage with negligible brand value. Lack of access to funding makes it difficult for the startup to develop the Minimum Viable Product (MVP) which is required for field trail and market launch
Customers: The startup needs to gain ground in terms of the market acquisition, market acceptance, and customer trust for the initial traction
Processes: The founders generally don’t have the right expertise to regularise and formalise core team culture and to onboard the right human resources which makes up the Key Managerial Personnel
Business Model: The startup faces challenges to define revenue channels, unit economics, and financial projections of the business
What should you know before raising this fund?
Step 1 should ideally include a thorough evaluation of your startup’s market needs and customers. This is crucial for your business’s foundation and market research. Your pitch to investors should ideally constitute a well-rounded business plan, including a study on the competitors, SWOT analysis, financial projections, current and potential valuations, and growth prospects. Read about things to keep in mind before pitching to an investor बेयाव
What are the different avenues to raise Seed Funding?
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DPIIT has created Startup India Seed Fund Scheme (SISFS) with an outlay of INR 945 Crore to provide financial assistance to startups for a host of requirements. SISFS aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. This enables the startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions. To know more about the scheme, बेयाव थु
Many other Central Government and State schemes offer early-stage funding, including NIDHI PRAYAS, NIDHI SSS, BIRAC’s schemes, TIDE 2.0, etc.
We have also created an exhaustive guide to throw light on multiple aspects of startup funding in detail. Read More.
