Voted #1 AI Writer
Seed capital is the initial funding used to start a new business or startup. It provides the financial resources needed to develop a business idea, create a prototype, or cover early operational costs before the company begins generating revenue.
Synonyms: initial capital, startup capital, early funding, seed money
Seed capital is crucial because it helps entrepreneurs turn their ideas into viable businesses. Without this early investment, many startups would struggle to cover essential expenses like product development, market research, and initial marketing efforts.
Startups use seed capital to build prototypes, hire key team members, conduct market testing, and set up basic operations. This funding stage often comes before the company has a fully developed product or steady income.
Seed capital can come from personal savings, friends and family, angel investors, or seed funding firms. For example, an entrepreneur might use seed capital to create a minimum viable product (MVP) to attract further investment.
