What is the most effective strategy for raising a seed round: selling a dream / traction / revenue?

The best set of steps are as follows: 1) Validate your idea without any financing 2) Try to get to paying customers before approaching seed investors 3) Bootstrap during that period 4) Get introduced to seed investors with a clean set of proof points 5) Pitch with a well articulated slide deck that answers ALL these questions: http://1m1m.sramanamitra.com/free-public-roundtables/the-1m1m-self-assessment/ Our philosophy: Go to investors like kings, not beggars. If you like, come do a dry run at a http://1m1m.sramanamitra.com/free-public-roundtables/. Selling a dream seldom works, unless you have track record as an entrepreneur and are working with investors who know your work.

Answer the following questions:1. Why is this a big problem (eg Uber)Who faces the problem : People who are partying on Saturday night in SF.How fast is the problem growing: It takes 30 minutes to find a taxi today, as opposed to 15 a year ago.A demo of the problem really helps: Step outside the room and try to find a taxi2. What are the current alternatives (eg Airbnb)Why are they inadequate: Hotels are expensiveHow do people currently deal with the problem: Stay with friends they get introduced to in offline networksIf you can describe hacks people do themselves to solve the problem even better: People list their apartments for 2 weeks on Craiglist, there are 10,000 such live listings in SF3. What are you building — describe the product (eg Instagram)Image > Text: Show a before and after ImageVideo > Image: People clicking an image, applying a filter, and posting to social mediaKiller Demo>>Pitch Deck : Click an image with the Investors, make it awesome, post to social media4. Industry/Market insights that you have gained (eg Facebook)What do you know that nobody else knows — This helps build businesses, not just raise money: People want to know each other’s relationship status.You need to have an answer to “Why can’t somebody build the same thing in a couple of months?”, or how some people like to think of it “What’s the moat around your business”: Others don’t have access to college networks we do, and there can only be one powerful network. We just need to capture the market quickly.You should understand the market better than most: Mark Zuckerburg: “I am college student!”You should also have answers to most obvious questions, VCs have a lot of them: Q: How do you expand this out of colleges? Ans: People have friends outside collegeVC’s also have a lot of “what ifs” where they move some pieces around in your business and try to understand your depth of understanding, conviction and ability to think critically: What happens once this leaves colleges how do we maintain the network effects? There are a lot of networks that follow similar structures like offices, hobby groups etc.5. Why you are the right people to solve this problem (eg Google)https://www.ted.com/talks/bill_gross_the_single_biggest_reason_why_startups_succeed/transcript?language=en and says the team is the second most important factor in the success of a startup.You should have an exceptional team, probably the hardest thing to achieve: Two Stanford Ph.D. candidates starting a company based on their area of research.Having been at it for a long time helps. Having quit your job helps more: Working on this problem full time for 6 months, having dropped out of the Ph.D. programme6. Why is now the best time ever to solve this problem (eg Coursera)If you saw Bill Gross’ TED talk linked above, timing is the most important factor governing the success of a startup.The same product at the wrong time most probably will not work :Stanford has been doing online courses for the last 5 years and last year we saw exponential growth in the number of external students taking the course. This is probably because of the price of the smartphone and access to internet.7. What is your “Secret Sauce” — Team/Experience/Technology etc. (eg Tesla)Ideas are not funded because they are good — they have to be ideas that could be game changing and for a VC, FOMO (Fear Of Missing Out) is the biggest reason to invest: The battery not lasting a long distance drive has been the biggest challenge which Tesla has now solved. Industry leaders are saying that this might be the decade’s biggest company.8. Recent action (eg any new VR company)Funding, new startups, news and announcements. People going gaga over something can be a reason for investment: Facebook bought Oculus for $1B9. How will you demonstrate scalability (eg Instacart)Growing from 1–100 should be the same as going from 100–1M: There new users constantly signing up, but Instacart doesn’t add new delivery staff. It is a marketplace.Show how you are a product. If you’re a service show you’re going to productize your service. Services driven business are harder to get money for and require more traction: Instacart is an aggregator , that aggregates the service providers and only owns the app.10. Niche — what is the niche market you’re going after (eg Whatsapp)Demonstrate what is the key demographic for your first win: These are going to be people who have migrated to the US and have family in other countries11. Who are the users (eg Pinterest)User persona: 25 year old woman who lives in SF and has a college degree and hangs out in Cafes.User behaviour and ideal product usage: Pinterest users should spend time scrolling through pins and pinning things they like. These will most probably be fashion items or home decor.12. Projections for growth (eg Slack)Revenues or users, depending on the sector: Growing at 2x MoM and all of these are paying customers.Here is how we answered these questions to raise our seed round from Accel and Helion:https://medium.com/cubeit-curate-your-content/the-13-slide-deck-we-used-to-raise-a-seed-round-without-a-finished-product-part-2-652d3fb018e1#.94f21o73r

If you have 45 seconds: "We are three CS majors. My two co-founders code with me and we all promote. Founder one went to Stanford and does marketing. Founder two was a cs TA and does growth hacking. I am CEO and I sell developers on joining for zero cash. We promote at conferences using Gua Gua Guacamole and plan on getting appx $50k in revenue by the time we teach ENGR145 to MBA's next summer at the GSB. If you don't know what growth hacking or Guacamole is/are, you should." (re-read and repeat so the VC can catch up because his mind wandered. If its a female VC, she will prolly fund you on the spot) If you have 5 seconds, say: "We are co-founded by three CS majors here at Palo Alto's Community's College. We all code. We all promote. We are launching in Austin Texas." Never lie about traction or stage you are in unless you are lying low. What I mean is that if you have 2200 users, say you're in alpha and have few or no users. VCs collect data so just start them off low. Be transparent. Mentor them about what you like and ask them for specific help. Most investors will say nothing or no, but read and execute this blog post: http://www.humbledmba.com/you-dont-get-shit-you-dont-ask-fo