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Module 1: The Funding Landscape

Module 3: The Series A Stage

Module 4: Later Stage Funding (Series B and Beyond)

Module 5: The Fundraising Process

Content

The journey to a successful funding round often begins close to home. At the pre-seed stage, professional investors are unlikely to invest because your idea is unproven and the risk is too high. This is where the "3 F's" come in: Founders, Friends, and Family.

1. The "3 F's" of Funding

This type of funding is often called "bootstrapping" because you are pulling yourself up by your own bootstraps. It is crucial because this initial capital is what allows you to build your Minimum Viable Product (MVP) and gather the initial traction that will eventually attract professional investors.

Founders' Contribution

The first investor in your company should be you. Using your own savings, working for free, or even using personal credit cards shows investors that you are deeply committed and have skin in the game. This demonstrates confidence and a strong belief in your vision.

Friends & Family

When approaching your personal network, it is essential to treat it like a professional investment. While they may want to support you, they need to understand the risks involved.


  • Be Transparent: Clearly explain the business idea, the potential risks, and that they may lose their entire investment.


  • Formalize the Investment: Use a simple legal document, such as a "promissory note" (a loan), or a "Simple Agreement for Future Equity (SAFE)". This protects both you and your relationship by making the terms clear and non-negotiable.

2. Other Pre-Seed Sources

Beyond the 3 F's, there are other sources of very early-stage capital.

Bootstrapping

Using revenue from your first customers to fund your growth. This is the ultimate form of validated learning because your customers are directly paying for your product.

Grants & Competitions

Some industries and organizations offer non-dilutive grants, meaning you don't give up any equity. Similarly, winning startup competitions can provide a small cash prize and valuable exposure.

Your pre-seed stage is a critical time for building momentum. Securing this first round of funding, no matter how small, gives you the runway to build your MVP and get the traction you need. In our next lesson, we’ll look at the seed stage, where you’ll transition from having an idea to a fully functioning business with a solid foundation.