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Seed funding is the initial capital raised by a startup to support early-stage business activities, such as product development, market research, and building a team. It is typically the first official money invested in a startup, often coming from founders, friends, family, or angel investors.
Synonyms: initial funding, seed capital, startup seed money, early-stage funding
Seed funding provides the essential financial resources that help startups turn their ideas into viable products or services. Without this early investment, many startups would struggle to cover initial costs and validate their business concepts.
Startups use seed funding to develop prototypes, conduct market research, hire key team members, and cover operational expenses. This funding stage is crucial for preparing the company for later rounds of investment.
Common sources of seed funding include personal savings, investments from friends and family, angel investors, and seed venture capital firms. For example, a tech startup might receive $100,000 from an angel investor to build its first app version.
