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A seed investor is an individual or entity that provides the initial capital to a startup company during its earliest stage of development. This funding helps the startup to develop its product, conduct market research, and cover initial operating expenses before it can attract larger investments.
Synonyms: early investor, initial investor, seed funder, startup investor
Seed investors play a crucial role in the startup ecosystem by providing the necessary funds that help new businesses get off the ground. Without seed investment, many startups would struggle to develop their ideas into viable products or services.
Seed investors typically invest in exchange for equity or convertible notes. Their investment is often the first external funding a startup receives, enabling the founders to build a prototype, hire a team, and prepare for future funding rounds.
Seed investors can be angel investors, venture capital firms specializing in early-stage startups, or even friends and family who believe in the business idea. For example, an angel investor might provide $50,000 to help a tech startup develop its app.
