Seed capital, also known as seed funding or seed money, is the initial amount of money an entrepreneur uses to start a business. It is a form of securities offering in which an investor invests capital in a startup company in exchange for an equity stake or convertible note stake in the company. Seed capital is generally the earliest form of capital a startup will raise. It is used to finance a companys first steps, including market research and product development. Seed funding is provided by private investors, usually in exchange for an equity stake in the company or for a share in the profits of a product. Seed capital can be distinguished from venture capital in that venture capital investments tend to come from institutional investors, involve significantly more money, are arms length transactions, and involve much greater complexity in the contracts and corporate structure accompanying the investment. Seed funding is generally one of the first steps investors offer to get startups on their feet before they become fully operational.

Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding. Much of the seed capital a company raises may come from sources close to its founders including family, friends, and other acquaintances. Seed capital may also come from product crowdfunding or from financial bootstrapping, rather than an equity offering. Government programmes are often tied to political initiatives and may provide seed capital for businesses that fall into various categories, such as green technology or pharmaceuticals.

In summary, seed capital is the initial amount of money used to start a business, and it is generally raised by private investors in exchange for an equity stake in the company or for a share in the profits of a product. Seed funding is generally one of the first steps investors offer to get startups on their feet before they become fully operational. Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding.