Startup Dictionary
Seed Round
Definition
The first official equity funding stage; typically represents the first official money that a business venture raises.
Deep Dive
The Seed Round represents the first official equity funding stage for a startup, typically following initial bootstrapping or small investments from friends and family. This funding is crucial for early-stage ventures to develop their Minimum Viable Product (MVP), conduct market research, build out an initial team, and establish foundational operations. It's called "seed" because it provides the initial capital to plant the idea and begin its growth, often before a company has significant revenue or a fully developed product.
Examples & Use Cases
- 1A tech startup raising $750K from a group of angel investors to build an MVP and validate user interest
- 2A new app concept securing $200K from an accelerator program as its seed funding to develop a beta version
- 3A founder receives $1M in a seed round to hire key engineers and develop their core platform.
Related Terms
Angel InvestorAcceleratorVenture Capital