Seed capital or seed money is the funding needed or spent to get a new business started. This initial seed funding, usually comes from the friends and family of the business owner(s). It often supports preliminary activities such as creation of a minimum viable product (MVP), market research, product research and development (R&D)…
Sources of seed funding:
– Grants: From governments, organisations or certain incubators.
– Friends and family: Comes usually as loans, or as an investment with minimal paperwork.
– Credit card dept, bank loan or own money: Not really investing, but can also be a source of the seed capital.
– Angel investing: In this case the seed investing becomes a form of securities offering in which an investor invests capital in a startup company in exchange for an equity stake or convertible note stake in the company.