After you’ve successfully navigated the Seed stage for business funding, Series A funding is then needed to further establish your customer base, product distribution, and business model. However, after the economy tanked, thousands of companies in the initial Seed stage were orphaned as the Series A Crunch began, making it seemingly more difficult for businesses to attract investors.
Although it appears to be more difficult to receive Series A funding, the requirements have remained unchanged for more than a decade. One fact that is true in 2014, and in the past as well, is the fact that there’s an excessive demand for funds, but a limited supply of financing. Competition is stiff to receive Series A funding, so you need to ensure that all of your ducks are in a row prior to seeking investors. To become more appealing to investors, leverage your SEO strategy to develop your business and marketing plans, which are needed to prove your current and potential business growth.
The Path from Seed Funding to Series A
It’s much easier to start a company than it is to receive the funding you need from investors, which why as of 2012, only 39 percent of Seed companies succeeded at raising follow up capital. During the Seed process, you’ve established your purpose, a theory plan for distribution, and your potential customer base to gain early stage investors. However, to move on to Series A funding, you now need a business model and proof connecting your product base to your customers. This involves defining your scale of distribution, geographical verticals, customer base, marketing plan, and more.
Shows Traction
With the essential elements of an effective SEO strategy in place, you not only show investors that the ability to reach certain metrics is a possibility, but prove that your product is gaining traction through your marketing efforts. Investors view this as proof that your company has the grounds to succeed. Even if your SEO strategy has yet to turn a large profit, investors for Series A funding aren’t always concerned with the amount of revenue you’re driving, but instead, the potential for revenue. With a large customer base developed, you’re able to prove that potential for revenue is there as you‘ve gained traction.
Shows you have Defined Customers
You’re showing investors that you’ve defined your company’s niche market and that you’re actively able to reach your targeted customers. This shows investors that you’ve already established your customers’ needs and how those needs will be met through the research you’ve conducted. Investors may be impressed that you are not only doing marketing, but understand SEO and why it is an important part of the marketing mix.
SEO Aids Distribution
As you’ve already reached your targeted customer base through keywords, content, and marketing, you have a good foundation for a distribution plan. Investors want to see the dream in a company they are investing in and how that dream will be achieved. With a solid online presence, you offer investors well defined potential for growth opportunities while distributing your product to a massive customer base that’s already in place. Furthermore, when you create pages for SEO that in-turn gives you areas to drive your other online marketing efforts.
Shows you have Done Market Research
As you’ve worked on your SEO strategy, you’ve conducted market research and analysis to figure out how you’re going to reach your customers. This offers less risk involved for investors as you’ve conducted the necessary research needed for your customer base. You’ve not only defined your customers, but your competitors. You now have proof to show investors that you’ve risen above your competition through finding gaps they have missed, producing new opportunities for business growth. You’ve already overcome the period of trial and error and hold the SEO and marketing analytics as proof.
Custom Tailored Business Plan
With all of the components involved in SEO, you’re able to create a well-defined and custom tailored business plan to present to investors. You can show exactly what worked in the Seed stage and what you’ll continue to implement to reach your goals while holding Series A funding, incorporating what you’ve learned into your business plan.
According to CB Insights, only 4 out of 10 Seed companies move on to receive follow up funding. By leveraging your SEO strategy to help you approach Series A investors, you’re able to prove just how you’ve caught your customers’ attention and the extent of their interest. In addition, you’re able to show how you’ll continue to market and distribute your product as the foundation is already in place. The larger potential customer base you’ve developed through search the most appealing you are to investors. Utilize the information you’ve gathered from your online campaigns to create a realistic business plan that’s ready to succeed. All it needs is the support of Series A funding.
Sources
“Using Your Business Plan to Get Funding” CEDSVG.com
“15 Ways to Prevent Startup Funding Disaster from Seed to Series A” by Josh Cline
