How can a new startup raise seed funding from investors?

You are asking the right question, you are aware of Seed Venture Capitals usually don’t fund ideas.

How a Venture Capital works is like a fund manager, Venture Capital raised funding from other investors such as funds, family offices, corporations and etc. They use the funds to invest in startups to generate an appropriate IRR (internal return rate) and the fund will usually needed to be closed in the period of 8–10 years. Means they need to generate returns from their investments by calculated risk. (and they have “bosses” to report to when doing investments)

Therefore, they preferred to invest in startups with the below:

• Working MVP/prototype : to prove that the founders are able to build a product even without external funding
• Product Market Fit (substantial traction in terms of userbase and/or revenue) : to prove that the product has a need in the market and able to pull in tractions such as active users and/or revenue.
• Proven revenue model : once you have product market fit then users will start paying (revenue; not to be confused with profit, they know that a startup usually can’t make profit initially especially with the overhead costs, but they need to know what’s the cost of revenue to bring in the revenue. This is important to gauge if they invest in X amount of money, how much revenue you can generate back, and how scalable this is with the leverage of technology to replace the overhead costs)
• Projected/Planned business model : Since a startup can’t make profit initially, what is the business model behind to eventually become profitable or push up the valuation.
• Planned Exit : Venture Capitals are here to generate returns for their funds, they have to make an ROI one day down the road. IPO, M&A or Buyout are the best ways for them to liquidate their shares. It can also be exit(s) between rounds
• A good story : why are you doing this, what is your unfair advantage and what makes you different from others? (Don’t start pitching with features of your product, VCs are human, human like story, so that they can tell the story to their investors and the future investors)
• Name your price. It is still a supply demand matter. Does your valuation & the shares you are giving out fit what they can accept. You just can’t sell a Toyota Prius with a Ferrari price tag on it.