What is seed investing?


Seed investing refers to the practice of providing financial support to early-stage startups in exchange for equity ownership. This type of investment is typically made in the form of a cash injection, and it is typically used to help the company get off the ground and begin operating.

Seed investing can be a risky endeavor, as many early-stage startups do not yet have a proven track record or a viable product, and there is no guarantee that the company will be successful. However, it can also be an exciting and rewarding way to get in on the ground floor of a potentially successful business, and can provide investors with the opportunity to be a part of the growth and development of a company from the very beginning.

What are the different types of seed investing?

  1. Pre-seed investing: This type of seed investing is typically the earliest stage of startup funding, and it is often used to help founders validate their business idea and build a prototype. Pre-seed investing is typically provided by friends, family, and other informal investors, and it usually involves smaller amounts of money.
  2. Seed investing: This type of seed investing is typically provided by professional investors, such as angel investors or seed funds, and it is used to help the company establish itself and begin generating revenue. Seed investments typically range from $50,000 to $2 million.
  3. Seed+: This type of seed investing is viewed as more of a bridge round before you reach a priced investment round (e.g. Series A)

Related Thoughts

What to understand about dilution when fundraising for your startup

Dilution refers to the reduction of an individual shareholder’s ownership percentage in a...

I received a term sheet from a VC, what’s next?

Negotiating the terms of an investment after receiving a term sheet typically involves...