Seed Funding

Seed Funding is a form of securities offering in which an investor invests capital in exchange for an equity stake in the company. The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own, or until it is ready for further investments. Seed money options include friends and family funding, angel funding, and crowd funding.

Seed money may also come from product crowdfunding or from financial bootstrapping, rather than an equity offering. Bootstrapping in this context means making use of the cash flow of an existing enterprise.