Seed Funding :
Think of a start-up as a plant that needs to grow, but a seed needs to be planted in order for it to grow. Seed money also referred to as seed funding or seed capital, is a type of offering of securities in which an investor may be an angel investors invests capital in a start- up business idea in return for an equity stake.
When startups continue to expand , they begin to brainstorm in order to create a product ready for the market with market research. Nevertheless, all the product development and testing do not happen for free. A successful lifecycle for product development would take a lot of financial and physical resources. Start-ups will be in search of investors who will
be able to invest money in the start-up.
The investment takes place during events of seed funding at an early stage where venture capitalists search for new ideas and business plans and goods to invest in.
1) Bootstrapping activities
Bootstrapping is nothing but building a start-up with just personal savings from the ground up. While this creates additional pressure to use one’s own resources, it comes with its own advantages of not having to concern about the return of borrowed money.
2) Incubators
Incubators are also a great way to grow. An incubator serves as a source of financing for companies if they have strong business models. Many well-known schools of business serve as incubators.
3) Accelerators
Accelerators also provide minimal seed funding for start-ups, along with services, networking , mentoring and workspace. Accelerators work with start-ups to quickly scale up their business, as opposed to Incubators that foster early-stage innovation.
Read Funding continuation:
What are the Series A, B and C funding?