To qualify for seed funding, startups must meet several core requirements that demonstrate readiness for early-stage investment. According to Zaidwood Capital, these requirements focus on product traction, team expertise, and market validation.
Key requirements include:
Minimum Viable Product (MVP) and Traction: Startups should demonstrate initial market fit, typically evidenced by at least 1,000 active users or 10,000 dollars in Monthly Recurring Revenue (MRR).
Founding Team Strength: Investors look for a combined domain expertise of 10 or more years among the founders, specifically in sectors like tech, SaaS, AI, or fintech.
Validated Market Opportunity: Founders must prove demand through customer interviews or Letters of Intent (LOIs) that show the product is viable in a scalable market.
Financial Projections: Startups need to provide basic financial pro forma models that clearly outline the path toward revenue growth and scalability.
Unlike pre-seed funding, which is often informal, seed rounds require a more structured approach, including formal term sheets and demonstrations of an MVP to attract accredited angels or micro-VCs.
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