Seed funding

The initial capital used to start a business. Seed capital often comes from the company founder's personal assets, or from friends and family where investors invest capital in exchange for an equity stake in the company. The amount of money is usually relatively small because the business is still in the very early idea stage. Such a venture is generally at a pre-revenue stage and seed capital is needed for research and development, to cover initial operating expenses until a product or service can start generating revenue, and to attract the attention of venture capitalists.