How to Raise Pre-seed Startup Funding

The toughest round of funding an entrepreneur will seek to raise is pre-seed investment. It has the lowest probability of success, the highest amount of ambiguity, is poorly defined, and causes the greatest amount of confusion and missteps out there.

Over 99% of the entrepreneurs who seek financing are rejected.

So, my humble advice to all entrepreneurs: please learn to assess your own probability of getting funded.

For our Seed Capital series of podcasts and blog interviews, I’ve interviewed hundreds of investors, especially micro-VCs and angels who play an important role in the early-stage game.

As I expected, a large number of investors are still chasing Unicorns. They are interested in investing in companies that will go from 0 to $100M in 5-7 years. And they will consume a great deal of capital in the quest of hitting the coveted billion-dollar valuation mark.

However, I am pleased to report that I have spoken with a good number of investors who recognize the niche opportunities.

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Best of Bootstrapping: Bootstrapped to $13M in Niche E-commerce

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

We continue to be bullish about niche e-commerce as a category to build sustainable businesses in. The journey of Pavel Sokolovsky, Co-founder of eComfort.com, is a further illustration of the trend. One year after we spoke in 2014, eComfort.com was acquired by Power Equipment Direct/Ferguson Enterprises.

Sramana: Pavel, let’s start at the beginning of your story. Where are you from? What is the genesis of your entrepreneurial aspirations?

Pavel Sokolovsky: I was born in Minsk, Belarus. I moved here with my family at a very young age in 1989. I grew up in the suburbs of Chicago. My father had an entrepreneurial background. In the mid-1990s, he started his own contracting business doing heating and cooling work. That was his second or third business by that time. I grew up watching him go through the trials and tribulations of entrepreneurship. I was inspired by it and when the time came, I wanted to have a shot at it.

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15 Udemy Courses on How to Transition from a Developer to an Entrepreneur

Millions of developers sit at their computers daydreaming about running their own company and making a difference in the world. They may even have fantastic ideas, but because they know nothing about business creation, they do not know how to turn ideas into a real company. 

The developer-to-entrepreneur way is not an easy one, but it can be done. It has been done repeatedly. At 1Mby1M, we specialize in helping developers make this transition effectively and successfully. 

If you are such a developer, this set of courses will help you. Let us start with case studies of successful transitions. To apply current discount coupons, click on the courses found HERE.

From Developer to Entrepreneur Case Studies with Sramana Mitra

After getting some inspiration, the first concept that you need to understand is Bootstrapping. 

Bootstrapping Startup Case Study with Sramana Mitra

What is Bootstrapping?

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Best of Bootstrapping: Bootstrapped a $7M Company in Houston

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

My conversation from 2014 with Gaurav Khandelwal, CEO of ChaiOne, became an interesting strategy discussion about a company doing substantial revenue based on services, had productized a piece of its services business that was also generating over a million in revenue.

Sramana: Gaurav, let’s go to the beginning of your story. Where were you born? What kind of background were you raised in?

Gaurav Khandelwal: I was born in Kolkata, India. I came to the US for my undergrad. I grew up in a large city and I really wanted to experience something different, so I applied and went to school in a very small town in northern Indiana that was in an Amish community called Goshen College. Different universities come through India and interview students and applicants. That gives students a chance to meet with deans and hear about the schools. I met with several of them and this particular school was very interesting. They had a program that required every single student to spend a semester abroad to graduate. I had never heard of that before. I thought it was fantastic to know that every single student at that school had spent a semester in Indonesia, China, or some other country.

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Best of Bootstrapping: Raised Series A with $10M in the Bank

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page.

Dean A. Stoecker is Executive Chairman and founding partner of Alteryx, a leading software developer and a pioneer of agile business intelligence technology with analytics. We had this conversation in 2012 when Dean was CEO.

Sramana: Dean, let’s start at the beginning of your personal story. What is the context for your entrepreneurial journey? Where are you from?

Dean Stoecker: I grew up in a family business in Colorado. I would sit around the table every day and hear about the trials and excitements of owning a business. I went to school at the University of Colorado. I had the opportunity to travel the world through a program called Semester at Sea. That was where I got the idea that I wanted to have my own business. After I graduated, I moved to California and got involved in the information business.

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Best of Bootstrapping: Bootstrapped Using a Paycheck to Exit

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page.

Bootstrapping using a paycheck is still a real trend. Here’s the case study of Axosoft shared by Founder Hamid Shojaee in 2014. The company was purchased in 2020 by Resurgens Technology Partners.

Sramana Mitra: Hamid, tell us a bit about yourself. Where were you born and raised and in what kind of background?

Hamid Shojaee: I was born and raised in Iran. I was 10 years old when we moved to the United States.

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Best of Bootstrapping: Bootstrapping a Big Data Company Using Services to Exit

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page.

We maintain that one of the best ways to identify complex problems worth solving inside enterprises is by offering services to them, thereby gaining exposure to the domain. DataSong is yet another case in point. After I spoke with Founder John Wallace, DataSong was acquired by MarketShare in 2015.

Sramana Mitra: Let’s start at the beginning. Where are you from? What kind of a backstory leads up to the entrepreneurial story?

John Wallace: I grew up in the South from a pretty modest background.

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Best of Bootstrapping: Bootstrapped Avelead Using Services from Atlanta

If you haven’t already, please study our free Bootstrapping course and the Investor Introductions page.

As usual, we love Bootstrapping Using Services case studies. Avelead CEO Jawad Shaikh shares his journey. Streamline Health acquired Avelead in 2021.

Sramana Mitra: Let’s start at the beginning of your journey. Where are you from? Where were you born and raised? What kind of background did you have?

Jawad Shaikh: I was born in Pakistan. I came to the United States when I was four years old. I lived here in the States my entire life. My story falls under the Entrepreneur Journeys because my family is a business family. My father had his own business. I used to work with him. My story starts there.

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