James Sinclair breaks down what seed investors actually care about: how big the market is and whether you're the right person to build in it. Product details and early team matter less because pivots happen.
Going for seed funding. Two things matter more than anything else on the planet. One, the market opportunity is the problem you're trying to solve. Big enough, big enough that if I give you some money at this high risk point where it's just an idea or a seedling of an idea of an mvp, that if it's successful, my return is going to be big enough to outweigh the risk. How big is the market? How big is the opportunity, how big is the problem? How big is the disruption? That's what I care about. If you're asking for 100k and there's a million percent chance that it's probably going to fail, I need a bajillion percentage chance that if it does succeed, I make a fortune. That's how you got to think about it. And then the second thing is, are you the right human, the right individual to actually take it there? Do you understand what you've got to do to actually make it a reality? Do you have the passion, the understanding, the intellect, the niche requirements that may may not be needed? It's a you conversation, it's not a team conversation, it's not a solution conversation. Size of problem solving, size of market, size of opportunity, and are you the right human? Everything else is secondary. Your solution is secondary. And the reason your solution is secondary is because you're probably going to pivot, adjust, move, iterate, change. The product or your solution that you're developing to the problem may not be the right solution to the problem, but you're going to use the seed money to find out if that's true. So your actual solution is almost secondary and your team, yes, huge. But ultimately, are you going to be able to put together a team, a high performing team capable of delivering? So all you're really proving when you have some people on board is the answer is yes to that. I think those are the two biggest things that you should be thinking about as you go raise kind of seed capital from individual investors or family offices. Is the problem a monster? And are you the right person to defeat the monster? Good luck.
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