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What is a Seed round?

Definition: A seed round is a company's first capital-raising stage.

It helps companies with their initial product development, market research, and product launch.

Types of seed funding

Venture capital provides the company with equity capital from investment firms in exchange for an ownership stake.

Angel investing is a form of funding where one individual provides capital in exchange for equity.

Accelerator programs provide companies with a small amount of funding, resources, and a network to help them grow.

Crowdfunding lets the company raise capital from many individuals, each contributing a small amount.

Bootstrapping lets founders avoid giving away equity by investing their own capital.

Friends&Family is similar to bootstrapping, but now close friends and family contribute to the funding

Debt funding is a type of funding where a company will borrow money from a bank and is expected to repay it with interest without giving away equity.

Government programs are provided by the government to help early-stage startups kick-start their ideas.

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Article FAQs

What is the difference between seed funding and pre-seed funding?
Pre-seed funding happens before the idea has been validated and is used to build the first version of a product/service. It is the stage before seed funding usually the first investors are the founders and their friends/family.
When should a startup look for seed investment?
When the product/service idea has been validated, and a clear business plan has been made. This should take place before the product launch.
How hard is it to get seed funding?
As investors are taking a big risk because the company hasn’t even launched, the seed round is very hard. It takes a long time to find investors, push them through a pipeline and secure a good deal.

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