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Seed Capital

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What is Seed Capital?

When a startup is first conceived, funding is needed to develop the company. Seed capital refers to this type of funding. Investors generally contribute money to the startup’s cause in exchange for a stake of equity in the company or a portion of the proceeds from the sales the company makes. Seed capital typically comes from private investors.

Seed Capital Examples

Examples of seed capital:

  • Example 1. Typically covers the costs of creating a business proposal
  • Example 2. Used to pursue ideas about a business or product
  • Example 3. Necessary since traditional funding from banks can be difficult to get due to lack of financial history in the new company
  • Example 4. Often the first investment a startup pursues

Here’s another web page about seed capital.

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