| STARTUP |
| REGISTRATION |
| DOCUMANTATION |
| COMPLIANCE |
| TAX_FILLING |
| COMPANY_TRADEMARK |
| CONVERT |
| LICENSE |
| ISO |
| Funding & Investment |
Seed funding is the first official round of investment that a startup raises to fund its early-stage operations. It is called "seed" because it represents the initial capital used to grow the business — much like planting a seed before it grows into a tree.
Startups use seed funding to:
Develop a minimum viable product (MVP)
Hire a small team
Conduct market research
Validate the business model
Launch early marketing and user acquisition campaigns
| Investor Type | Description |
|---|---|
| Angel Investors | Wealthy individuals investing their own money in exchange for equity. |
| Friends & Family | Informal investors who invest based on trust and personal relationships. |
| Seed Funds | Dedicated venture funds focusing on early-stage investments. |
| Accelerators & Incubators | Programs like Y Combinator, Techstars that provide capital, mentorship, and resources. |
| Crowdfunding Platforms | Raise small amounts from a large number of people (e.g., SeedInvest, Republic). |
| Factor | Detail |
|---|---|
| Investment Amount | $10,000 – $2 million (varies by region and sector) |
| In Exchange For | Equity (5% – 20%) or convertible notes |
| Stage of Startup | Idea to early MVP stage |
| Goal | Product development, team building, market entry |
| Instrument | Description |
|---|---|
| Equity | Direct exchange of investment for shares in the company. |
| Convertible Notes | Debt that converts into equity during a future funding round. |
| SAFE (Simple Agreement for Future Equity) | Popular in the U.S., gives investors future equity without setting a valuation now. |
Build an MVP – Investors want to see at least a basic working version of your product.
Validate the Idea – Show that users need your solution through market feedback or early traction.
Have a Clear Pitch – Explain your problem, solution, market size, team, and business model in a compelling way.
Prepare Financials – Create a basic financial model and projections for the next 12–18 months.
Legal Structure – Ensure your business is registered properly and legally ready for investment.
Early capital to build your product
Access to networks, mentorship, and expertise
Increased credibility with future investors
Faster time to market
Equity dilution – Giving away a share of your company at a very early stage.
Loss of control – Some investors may demand board seats or influence.
Pressure to grow fast – Funded startups are often expected to scale quickly.
Valuation issues – Setting the wrong valuation early can affect future rounds.
| Startup | Seed Round Investors | Outcome |
|---|---|---|
| Airbnb | Y Combinator, Sequoia | Now a public company (IPO) |
| Dropbox | Y Combinator, Sequoia | IPO in 2018 |
| Uber | First Round Capital, Chris Sacca | Grew to a multi-billion dollar company |
| Initial seed from friends | Acquired by Facebook for $19B |
Seed funding is the critical first step in a startup's fundraising journey. While it brings much-needed capital and resources, it also marks the beginning of a long-term relationship with investors. It's important to raise just enough to achieve clear milestones, without giving up too much equity or control too early.
✅ Pro Tip: Raise seed funding only when you need it and can clearly articulate how you’ll use it to reach the next stage (e.g., product-market fit or Series A).