Business Terms Glossary

Seed Money

Definition of Seed Money

Seed Money is the first round of investment capital for a start-up business.

Seed money provides startup companies with the money they need to fuel their initial development and growth. The investment can be in the form of a loan, an investment in preferred stock or convertible bonds, or an investment in common stock.

Angel investors and early-stage venture capital funds often are involved in seed stage funding rounds.

If you are a very wealthy individual, you should make a few seed stage investments each year. Without seed money, talented entrepreneurs will never get out the gates and great ideas will languish.

Unfunded entrepreneurs are probably the biggest waste of human potential in the history of mankind, and you need to do your part to give back. In addition to simply doing the right thing, you'll probably make a nice return on the investment as well.

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