Raising seed capital is a critical step for any early stage startup. Seed funding helps entrepreneurs turn their ideas into reality by providing the initial capital needed to conduct market research, build a prototype and attract first customers. Finding the right seed investors is key, as they often provide value beyond just capital, like mentorship, industry connections and operational support. This article discusses the top seed capital firms entrepreneurs should consider when seeking pre-Series A financing for their fledgling ventures. With insights into their investment strategies, sector focuses, portfolio companies and founders they’ve backed, you’ll be better equipped to identify the optimal seed investors to pitch. There are multiple references to seed capital and early stage investment throughout.
Y Combinator – The premier startup accelerator
Y Combinator is perhaps the most prestigious seed investor in Silicon Valley. Their accelerator program provides $125k in funding to startups, along with an intensive 3-month program to rapidly iterate and grow. YC has backed over 3000 companies including unicorns like Airbnb, DoorDash, Coinbase and Instacart. They invest across all sectors but have particular interest in bio, AI, AR/VR, space, crypto and frontier technologies. YC looks for driven founders aiming to build billion dollar companies. Getting into YC lends credibility and opens doors for startups. YC is stage agnostic, often participating in later rounds of top performers. Their vast alumni network also facilitates cross-pollination between portfolio companies. For software entrepreneurs, applying to Y Combinator should be a top priority when fundraising.
500 Startups – Global seed fund with 4000+ alumni
500 Startups is a prolific seed investor with a portfolio of over 4000 companies across 75 countries. Focused primarily on tech startups, they’ve backed the likes of Canva, Grab, Twilio and Udemy. 500 Startups runs an accelerator program while also making seed investments outside of it. check size is typically $150-350k. They have a distributed team model with partners across the world, enabling them to connect startups with strategic investors and corporates globally. 500 Startups is sector agnostic but is especially bullish on fintech, proptech, future of work, B2B SaaS and marketplace startups. They also run a separate crypto fund focused on blockchain companies. Founders value 500 Startups’ global footprint and their hands-on approach even post-investment.
First Round Capital – Leading seed fund with 200+ portfolio exits
First Round Capital has seeded hundreds of great companies like Uber, Square, Notion, Roblox and Warby Parker. With over $2 billion in assets under management, they are one of the most established dedicated seed funds. First Round Capital provides between $500k to $2 million in initial funding, while also supporting their portfolio through programs like First Round Commons – their founder community platform. They focus on early stage consumer and enterprise software startups across industries like fintech, edtech, healthcare, cybersecurity and more. First Round Capital leverages their sector expertise and vast founder network to help portfolio companies recruit key hires, enter new markets and raise follow-on capital.
Sequoia Scouts – Seed program by top VC Sequoia Capital
Sequoia Capital is widely recognized as the top venture capital firm, known for early investments in Apple, Google, LinkedIn, YouTube and WhatsApp. Sequoia Scouts is their program focused exclusively on pre-seed and seed stage companies. Through Scouts, Sequoia makes initial investments of $100k-$2 million into early startups they want to develop close partnerships with. Sequoia Scouts looks for bold founders building disruptive solutions in areas like SaaS, fintech, consumer internet, healthcare and cybersecurity. The program grants promising startups access to Sequoia’s formidable global network and top-tier resources. Sequoia often reinvests at the Series A onwards into their highest conviction Scout investments.
GV – Alphabet’s seed investing arm
GV (formerly Google Ventures) is the venture capital arm of Alphabet Inc. They make seed and early stage investments in technology companies across sectors like AI, cybersecurity, enterprise software, consumer internet, life sciences, robotics and more. GV provides between $100k to $2 million in initial funding, participating in further rounds for top performers. Having backed über-startups like Uber, Slack, DocuSign, Nest and Flatiron Health, GV focuses on outliers pursuing massive addressable markets. Benefits for portfolio companies include close involvement of GV partners, engineering support from X labs and access to Google’s infrastructure, talent and network.
In summary, Y Combinator, 500 Startups, First Round Capital, Sequoia Scouts and GV are some of the top seed investors that founders should consider pitching for pre-Series A capital. With strong track records, global reach, value-added services and investment firepower for follow-on rounds, these firms can catalyze the growth of early stage startups. Securing seed funding from an established investor also helps validate your startup and open doors for future fundraising.