Creating a target investor list for your seed round

Written By

Matt Speiser

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A seed round is typically the first round of financing a startup will raise. As such, seed fundraising is also the first exposure founders will have to the world of venture capital. This means founders are often drinking from a firehose — trying to learn the nuances of VC while simultaneously shopping their business around to find an investor who can help grow the business over the next 5-10 years.

It can all feel quite overwhelming, which is why it helps to break it down into more manageable steps. Here, we’ll explore one of the earlier steps in the process: creating a list of target investors to reach out to for your seed round.

When to raise seed funding

In general, startups raise seed funding when they start to see a little bit of traction in the market, and they need a cash infusion to help achieve product-market fit (PMF). A seed-stage startup should have a product, a few real users, and a team in place (even if it’s just two founders).

That being said, a startup’s ability to raise seed funding can be influenced by numerous factors, including the founders’ reputation, how compelling the idea is, market demand, and the macroeconomic environment. For example, a startup with a really compelling idea and founders with impressive backgrounds might be able to raise a seed round to test their idea, even if they’ve yet to build a product.

With that in mind, founders should seek seed-stage funding if and when they truly believe they can raise the valuation of the business enough to achieve venture-scale returns for their investors. This is not a decision to take lightly, as once you accept funding from VCs, they’ll expect you to work expeditiously to grow the business and increase shareholder value.

If you’re committed to the journey, the next step is to figure out the right VCs to partner with on your startup journey.

What to look for in seed-stage investors

Many founders liken raising seed funding to a sales or marketing funnel. One must attract potential “leads” (i.e., investors), nurture them, and finally convince them to “convert” (i.e., invest).

And just as the first step in any such sales or marketing process is understanding who your target market is, the first step in raising a seed round begins with identifying your target investors. While the world of VC is relatively small, there are many different types of VCs. These VCs are differentiated based on a variety of factors, such as the sectors they invest in, their check size, domain expertise, the types of support they provide (e.g., intros to clients, prospective hires), geographies where they invest, and more.

As a founder, you should consider the type(s) of investors you want to partner with that you think will be most impactful for your business. For example, you may value an investor with a certain type of experience, or one who has already made investments into startups in your sector.

With these factors in mind, compile a long list of all potential investors who could meet your criteria (we’ll whittle it down later). To find investors for your list, consider consulting the following online resources.

  • AngelList
  • Crunchbase
  • Pitchbook
  • Mercury’s investor database
  • Forbes Midas list
  • Twitter (many VCs maintain an active presence on the platform)

You should also consult with people in your network, including friends, family, any current investors, and your startup accelerator or incubator (if your business is associated with one). Once you have a list of investors you’d potentially be interested in speaking with, organize them using a spreadsheet tool (Google Sheets, Airtable, and Notion are popular free options). Having this sort of organization will make the research and outreach process much smoother.

Brent Franson, CEO of Most Days, shared the spreadsheet he used to keep track of prospective investors when he raised his company’s seed round.

How to qualify prospective investors

With a list of investors in place, it’s time to go about the process of “qualifying” each investor for outreach. This means drilling down further into your list of investors, whittling the list down to the top 30 or so you’d most want to partner with, and then ranking that list from most desirable to least desirable.

Factors you should consider when identifying your top investors include:

Most common investment round

If the investor primarily focuses on later-stage, they likely won’t be an ideal partner for a seed-stage round, as the expectations for later-stage startups vs. early-stage startups are vastly different.

Lead or follower

Some VCs lead investment rounds (i.e., write the largest check), while others write follow-on checks (smaller checks based on the same terms as the lead VC). You’ll likely want to find a lead investor before you speak with follow-on VCs.

Brand and reputation

If the VC works at a brand-name firm (i.e., a16z, Sequoia, Benchmark, etc.), it could be seen as good signal for your business, making it easier to attract talent and other investors. On the other hand, if the VC is relatively unknown, or if other founders have had a bad experience with them, it could make it seem like your business can’t attract reputable investors, which is a bad signal to the market.

Track record

A VC’s track record often goes hand-in-hand with their reputation. Generally, a VC who has invested in other successful businesses will probably be a better value-add for your business than a VC who hasn’t made many other deals, or who hasn’t made many successful investments. A poor track record could be an indictment of a VC’s ability (or lack thereof) to help their portfolio companies.

Fund LPs

Who are the investors your lead VC raised capital from to invest in your business? Different LPs have different expectations around access, performance, and information sharing, so it’s important to have insight into whose money you’re accepting.

Domain expertise

Most VCs are former founders and operators themselves, with unique insight into the sectors they invest. Aside from capital, advice is one of the biggest value-adds a VC can provide, so it’s important to find an investor who you feel can provide worthwhile advice to help your business scale.


In addition to advice, a good VC can make introductions to talent, other investors, and potential customers.

Once you’ve collected this data, stack rank your list based on who you see as your most ideal investor vs. your least desirable (but still acceptable) investor. Alternatively, some founders group investors into several tiers based on who they think is most qualified vs. least qualified.

The ultimate goal here is to move from a long list of investors to a small list of investors you’ll contact to raise your seed round.

How to conduct outreach effectively

The best way to reach out to investors is through warm introductions. However, most founders don’t have the benefit of knowing someone who can introduce them to their target investor. If you don’t have an “in” with an investor, there are a handful of ways to go about cold outreach:

  • Email the VC directly (assuming you can find their email)
  • Email their firm’s inbox (most VC firms have an email for founder pitches)
  • Reach out via social media
  • Attend a startup event you know the investor will be at

Did you know?

Perfecting your pitch is one way to ensure a successful fundraising round — but even a flawless pitch can't help you if you're not able to get it in front of the right investors. Mercury Raise was created precisely for that reason, to give founders a greater chance at success with tools and resources designed to remove roadblocks at every stage of the startup journey. This includes Investor Connect and the Mercury Investor Database, both of which help founders identify and connect with the right investors with minimal friction.

Explore Mercury Raise

Many founders recommend phased outreach, where you contact your top investors first, then work your way down your list.

If you make contact with a target investor, the first thing they’ll likely want to see is your pitch deck. Your pitch deck is a slide deck that explains what you’re building, the problem you’re trying to solve, why your team is qualified to solve this problem, the market you’re operating in, and why you’ll win.

A good pitch deck is concise, compelling, and tells a good story about your business. Some VCs will want to see your pitch deck prior to meeting, while others will set a meeting with you where you can walk through your deck.

Many founders recommend stacking all your investor pitch meetings within a short window, so you don’t have to be distracted by fundraising for an extended period of time. Another hack is to meet with your Tier 2 investors first and refine your pitch based on their feedback, so you can nail your pitch with your Tier 1 investors.

Also note that interest from a VC is leverage. If one VC expresses a desire to invest, founders can often use that to entice other VCs to make an offer and bid against each other.

Choosing who you take money from as a seed-stage startup is crucial, as this VC will be part of your journey for the next 5-10 years. Creating a thoughtful investor list is the first step toward ensuring your seed round is a success.

Written by

Matt Speiser

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