A securities offering whereby one or more parties invest in a new business by securing enough funds to start and operate it for a period of development unit it reaches either a stage where it is able to generate its own funding, or has created some product or service offering that is worthy of future rounds of funding. Seed money, in the investment parlance, is venture capitalist’s contribution toward the funding of a start-up business. Financing usually takes the form a subordinated loan or an investment in convertible bonds or preferred stock. Seed money is normally considered the basis for additional capital to address growth requirements.
Seed money is also known as seed funding.
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