Building a product that solves a very real problem is only half the answer to how to get seed funding.
The other part that you’ve got to nail, one that’s often brushed under the rug, is your investment in the idea.
Is it something you’re actually passionate about solving? Does it stand on your strengths instead of shortcomings?
The more honestly you answer these questions, the more clearly and effectively you’ll be able to express your ideas in your funding pitches.
I say this both as an angel investor who pays close attention to founders’ passion and as the co-founder of Decipad that secured $5M funding in 2022, double the size of a typical seed round that peaked to $2.5 million that year.
Investors aren’t looking for the next transformative idea. What they are looking for though is clarity — clarity around what you’re building and what you bring to the table that’ll make your startup a success.
The clearer you are about what you’re building and why, the more concisely you can express yourself — and win over investors in the process.
It’s this clarity that’s led me to invest in startups like Auth0 as an angel investor. It’s also how Paul Graham, a YC partner, evaluates whether a startup is worth the investment.
But how do you unlock this level of clarity?
Most would tell you a proven startup idea aims to solve a real problem. True. But that’s only half the answer.
The other half comprises of how passionate you are about solving the problem. Because:
1) Passion is a predictor of resilience, something investors always look for before opening their wallets.
2) Passion fuels your work far more sustainably than any amount of startup funds alone can.
Now to find and frame this idea:
Directly engage with the itch you want to scratch — at least in some way — so you know exactly how intensely it needs solving.
In Decipad’s case, after founding the engineering and design consultancy, YLD, I learned how complicated it is for non-technical people to meaningfully use data to collaborate and contribute to modern businesses.
You’ll know exactly how grave this problem is if you’ve ever:
Next, understand the impact of solving the target problem. This helps you validate your idea’s importance and better shape the story you want to tell.
So on the surface, we’re building a tool for financial planning and analysis with Decipad. But really, we want to change the way cross-departmental teams interact with numbers to make data decision-making accessible to all.
And that’s just not Decipad. Take these well known names:
Understand and lean on your strengths
On the contrary, be honest about your shortcomings too. For instance, I like 0 to 1 business and don’t enjoy managing people or inventory. So building a delivery service is not something I would do.
Write down a list of things that matter to you
Based on it, make sure the startup idea you’re working on fits your worldviews and expectations of personal work. If at any point you realise the idea you’re working on no longer aligns with your criteria, try to adapt it.
If the idea’s not adaptable, pick a different one.
When all is said and done, your answer to this question that I always ask when evaluating startup ideas should be positive:
If I woke up tomorrow and had to work on this idea, would I jump out of bed for it? Better yet, would I not sleep because I enjoy working on it so much?
Once you have a solid idea and know it aligns with your values and strengths, get down to clearly expressing yourself. To make it happen:
Initially, you’ll find VCs know a lot more than you. But that’s good because it’s essential learning for you.
As you talk to experts in the market your product sits in, you’ll have similar feelings: they know a lot. And again, that’s fine in the start.
Just make sure you’re learning as best as you can so that you can start developing your opinion about the space you’re building in.
Most of all, stop looking for answers and start asking the right questions. And do it often. Because what distinguishes us, humans from machines, is our critical thinking, and what fuels it is asking the right questions.
Ask “why?ˮ when most people donʼt. When you ask “whyˮ and most people donʼt, you end up with a different position than most people. Because when you question things, you question the status quo and so find yourself a contrarian idea that helps you create novel solutions and outwit the competition.
Finding yourself not having enough industry know-how? I highly recommend getting a cool job to learn more so you can get first-hand experience of the problem you want to solve.
Think of this as an exercise to:
To add, publishing your thoughts also helps you network and build relationships with industry thought leaders. By consistently sharing your experiences, you also position yourself as an authority in your field.
Instead of using competitors’ success to validate your ideas or copying them, always ask: “Why should we do it,” “What are the fundamental reasons for it apart from copying them?”
Simply because validation does not equal success. A competitor going in a certain direction and raising a bunch of money is validation. The investors validate them. But you never know if it is working out or if itʼs making sense with the market.
Instead of opening with a sweeping statement of the outcome you’ll achieve or highlighting how big the problem is, describe your product.
YC partner, Paul Graham calls this explaining your product “as a variant of something the audience already knows”.
For example, we concisely explain Decipad as “Notion for numbers.”
Similarly, Clubhouse described themselves as “Twitter, but for voice.”
See how this helps you immediately visualise the product idea? It’s how it helps investors too — making it an effective way to clearly explain what your product does or will do.
Briefly, raising seed capital boils down to:
And remember: you canʼt truly learn from others, you have to make your own way, ask your questions, and make your own mistakes to learn.
Because while startup stories are useful to read and know, you can’t expect what worked for others to work for you. These stories are told in very linear ways, they miss out on a lot of context, they donʼt always talk about the failures, and they certainly donʼt come with disclosures.
With all that said, I’ll leave you with the checklist that you can use as a guide to securing your next seed funding:
✅ Start with questions and work to answer them
✅ Get first-hand experience of the real problem you want to solve
✅ Write down your strengths, shortcomings, and values (be honest here)
✅ Identify how it connects with a pressing world issue you’re passionate about
✅ Review if your startup idea and its impact align with your strengths and values
✅ Talk to venture capitalists and market experts to learn the space
✅ Build your opinions by writing about the competitive space
✅ Identify and refine what makes your product unique
✅ Be clear and specific about your idea and ask in funding pitches
Stay in the loop with updates from our team and community.
Once a month.
