Seed Round Fundraising on Financing Early-stage Startups in Indonesia

Abstract

Early-stage startup growth has become the main focus of Indonesia’s government in driving economic growth through the digital business adoption. However, running out of cash or failing to raise new capital is still considered as the main obstacle for early-stage startups in growing and maintaining their business in the market. The difficulties faced by earlystage startup founders due to the lack of financial projections and misvaluing their business in convincing potential investors to get funding. This study focuses on early-stage startups getting funded through seed round investment as getting funded by financial institutions is not an option due to the intangible assets early-stage startups have. Moreover, the objective of this study is to examine the parameters of loans, credit, and funding in organizational and institutional settings. The study was conducted by interviewing startup founders who have gone through and successfully secured seed investment. The result of the analysis shows eight indicators influence investors in determining their investment. By optimizing these indicators, it is expected that early-stage startups become easier in obtaining funding especially in setting the best optimal amount of money to fundraise for their business sustainability.

Keywords: Early-stage startups, seed round investment, investors