SeedBlink Blog

SeedBlink recently hosted a webinar on the VC view on early-stage investments with special guests Cristian Munteanu, Founder and Managing Partner at Early Game Ventures, Stoyan Nedin, Partner at Vitosha Venture Partners, and moderated by Angel Hadjiev, Managing Director, SEE at SeedBlink.

During the session, they covered:

• What early-stage investors look for in a startup;
• How to prepare for approaching a VC and for an investment round;
• Milestones of a funding round, including expected timing;
• How much should you ask for in a fundraising round?
• How much equity should you give to your investors?
• What to expect from the relationship with an investor.

The following sections dive into several insights shared during the session, covering the elements that early-stage investors prioritize when evaluating startups. From the importance of a strong founding team and demonstrating traction to crafting the perfect pitch and understanding the role of investors post-investment.

One note before you dive in, on capital availability: Unlike a decade ago, there's more capital in Europe now - what's most needed are high-potential startups ready to grow. Now, let’s see what it takes for them to do so.

The role and impact of a good team

One of the first points of focus of the discussion was the impact and role of a strong founding team in securing early-stage investment. Cristian and Stoyan addressed that investors prioritize teams that show trust, competence, and dedication.

A good team demonstrates technical skills, market knowledge, and the resilience and adaptability a founder need to overcome challenges.

Cristian:

“What investors are looking for at the early stage in a startup is, in my opinion, a convincing team—a team that can gain your trust as an investor. The team should be able to transmit trust, competence, commitment, and a desire to build something ambitious. So the team, of course, is super important.”

Investors look for teams with a clear vision and the ability to adapt to changing circumstances. A convincing team has confidence in its ability to execute and build something ambitious. The right combination of expertise, commitment, and chemistry within the team can often decide whether an investor chooses to back a startup.

Cristian:

“The second thing is that this team should be working on something interesting. All investors have industries of choice and investment theses for specific verticals. There must be a click between what the startup is working on and what the investor wants to invest in. For example, I am interested in AgriTech but not in startups that are very hardware-intensive in agriculture. Even if the team is convincing, competent, and has long experience in the field, it is not a fit for us if they are working on a very hardware-centric idea.”

Additionally, Cristian and Stoyan pointed out that alignment between the team's focus and the investor’s interests is another important element. Each investor has industries or verticals they prefer, and a team's understanding of these preferences can significantly improve their chances.

Ultimately, a founding team's ability to convey their passion, competence, and adaptability often makes the difference in attracting early-stage venture capital.

Stoyan:

“One of the first things we want to see in the team standing before us is that all the assumptions and visions are reasonable. In simple terms, we want to see common sense, which, although a cliche, is not very common. When someone presents reasonable assumptions and ideas, we can project this thinking into all other aspects of their plans and future actions. For example, we want to see a reasonable solution for the market. We want to understand if the team suggests a solution for which people would pay money.

Many founders are delusional about what customers would pay for—they may have an efficient idea, but if it doesn't address a big enough pain point, especially for people with deep pockets, it won't work. We also want to see large markets; small solutions for small markets are typical, but we dream of great solutions for large markets. We want to see a plan, a strategy, and the team's capability to approach the market.”

Traction goes beyond revenue for early-stage startups

In addition to the importance of the founding team, another key takeaway from our discussion on early stage investments was the role of traction in securing a fundraising round.

Cristian and Stoyan say that traction goes beyond early revenue figures. It can include demonstrating proactive efforts like finding the right co-founders, engaging with potential customers, and building prototypes. These efforts show investors that you and your team are taking active steps to understand the market and solve real problems, even before significant revenue is generated.

Cristian:

“In our first fund, none of the companies we invested in were making money at the time. Fast forward five and a half years, and our portfolio now generates over €45M in annual revenue, with two businesses leading the way and employing more than 400 people. We invested in ideas, stories, and what these founders planned to build. With our second fund, we're doing the same—investing in companies at the very early stage, often with no revenue. But as Stoyan rightly says, traction isn't just revenue. Traction is the effort to find the right co-founder, deeply understand the problem, and engage with customers. It’s about showing you're not just talking but doing, and that's fundamental for us when investing at this stage. I'm not looking for startups already making €1M in monthly recurring revenue—that's too late for me. I want to be the first institutional investor in a company that, after my investment, will grow to make millions. Early-stage investing involves higher risks but also offers lower entry prices."

As a first-time founder, you can effectively showcase commitment by getting technical help to develop a Minimum Viable Product (MVP) or initiating early conversations with potential partners.

Stoyan:

“You can, for example, talk to a developer or convince one—maybe your cousin—to create something for the MVP, even without money, by offering equity. Or you could speak to partners or customers. Actions speak louder than words, and we want to see a team that has done everything possible before approaching us. The opposite end of the spectrum is people who’ve spent 10 hours on a pitch deck, haven’t spoken to anyone, and just want funding to get started.”

The evidence of proactive actions, such as building relationships and setting realistic milestones, helps you as a founder to prove that your startup has what it takes to succeed. Investors appreciate founders who demonstrate they are deeply committed and resourceful, especially when they haven’t reached profitability.

Angel:

“What I’m hearing is that founders at the seed stage need a blend of resilience, adaptability, and vision. The early journey is incredibly challenging, and you’re looking for dedication. Those who succeed are highly adaptable, able to pivot based on market feedback and grounded in a clear mission and long-term vision. These are critical qualities to demonstrate when speaking with a VC.”

Prepare the right pitch and have realistic expectations

Another major takeaway from the discussion was the importance of preparing the right pitch and setting realistic expectations.

Cristian and Stoyan mention that a compelling pitch is clear, brief, and impactful, capturing an investor’s attention within the first 10 seconds is essential. Before showing your pitch deck in front of investors, make sure this covers all aspects of their business, including market analysis, competition, and go-to-market strategy. The depth of preparation demonstrates to investors that the founders have a solid understanding of their business and the industry landscape.

Stoyan:

“I encourage you to go deep when developing your pitch deck. The deck is a powerful tool—it’s no coincidence that it’s the standard pitching instrument worldwide across all geographies and sectors. A well-crafted deck answers the essential questions investors need to know and reflects the depth of research, planning, and understanding entrepreneurs should demonstrate. The level of detail in your deck shows us your seriousness, research, and grasp of your business. Missing components or gaps in your story can raise red flags. For example, you might have a great product and business model but fail to research your competition, finding it’s saturated with lower-priced alternatives. Or your go-to-market strategy might not account for a long sales cycle, leaving no realistic way to sell to your target customers.

Every component of the pitch deck matters.“

It is equally important for founders to set realistic expectations for valuation and fundraising.

Our guests also added that founders need to be mindful of what venture capitalists look for—namely, a significant growth potential that can lead to a substantial valuation in the future. Aligning a startup's potential with investor expectations helps foster productive discussions and ensures both parties are on the same page regarding the company’s future trajectory.

Ultimately, a well-prepared pitch and realistic expectations allow founders to establish credibility and build strong relationships with investors. By being honest about what they can achieve and setting attainable milestones, founders can show investors that they are both ambitious and practical, increasing their likelihood of securing funding.

The role of investors after the deal

The role of investors after the deal is also an important aspect to consider. Cristian and Stoyan mentioned that investors differ significantly in their approaches, some prefer a hands-on role, while others adopt a light-touch strategy. Hands-on investors provide active guidance, attend meetings, and assist with major business decisions.

In contrast, light-touch investors are more inclined to offer support only when explicitly requested by the founders. Your goal as a founder is to understand these differences and choose investors whose approach aligns with your preferences and needs.

Cristian:

“There are hands-on investors and those who prefer a light-touch approach, and this is often reflected in investment documents. Hands-on investors might include clauses requiring their approval for expenses above a certain threshold. As minority investors, we recognize that the founders, as majority shareholders, are the operators. It’s their company, and they make the calls. Our role is to support them with whatever they need and nothing more. That’s why we focus on being helpful where it matters—whether it’s making intros to partners or assisting with recruiting—but we don’t sell for the team. If a startup has no idea how to sell its product or service, that’s a dealbreaker for us. Founders must be capable of driving their own sales and growth.”

Watch the whole webinar

For more insights, watch the whole SeedBlink webinar on the VC view on early-stage investments.

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