Sources of seed funding

I am blogging from the MIT Enterprise Forum sponsored talk about raising seed funding at MIT. On the panel are representatives of Techstars, Spark capital, Google ventures and a angel/serial entrepreneur. About 10 minutes in, I heard something particularly interesting:

VCs are often hesitant to come in and invest in start-ups that have received angel funding already. They would rather be first investors. I did not understand why, I intend to find out.

Moderator asked what can inexperienced entrepreneurs do to get funded. Rich Miner said good ideas will be funded and to send email to miner@google.com. Shawn (techstars) pointed out that people in Boston are reticent as far as it comes to publicizing themselves as angels or people with good ideas and encouraged people to speak up.

Moderator asked generically, what can founders do to be successful raising a seed round? Shawn (techstars) says move the duck (idea) forward. Make progress. Spark rep. advises being ambitious and contacting highly placed people for advisors. Miner (Google ventures) says to be organized and focus on fund raising. Cold call people and ask for advice. David (angel) says to have a good elevator pitch that can be delivered in less than 2 minutes.

Twitter qn: What milestones need to be hit before looking for seed investment? Answer: depends on start-up. Need to agree with investor what that is for your start-up. An interesting response from David: if you are a new entrepreneur, take what you can get. Don't push for one form vs. another, take what you get. If you, the entrepreneur, are integral to the business, investors will give you equity in later rounds to keep you. If you are good at what you do, you will get compensated properly. Save the negotiations for the second start-up when the first has been successful.

Qn: if you are an angel looking to invest the first 25 to 50 K in a company, what should you look for? Answer was a vague look at the team and essentially, go with the gut.

Qn: among panelists, who invests in what industry sector and how capital intensive would they like their investments to be?
Spark: media, technology.
Techstars: extremely capital efficient businesses. B2B, consumer Internet, SaaS plays