Seed capital (Seed money)

The first round of capital provided to start-up companies with the capital required for their initial development and growth for a start-up business. Seed money usually takes the structure of a loan or an investment in preferred stock or convertible bonds, although sometimes it is common stock. Angel investors and early-stage venture capital funds often provide seed money. They purchase an equity-based interest in a new or existing company. This seed capital is usually quite small because the venture is still in the idea or conceptual stage.