What is the seeds?

seed investors are a type of angel investors who contribute to financial resources and provide other types of support during the first phases of the launch of a new business or business project. Unlike other types of investors, the investor of the seeds of seeds contributes its contribution soon, and then eventually withdraws from the project at a certain time point; After collection, the investor can start to receive a return on the investment. The cash allowance provided by the investor usually takes the form of a one -off investment of capital on the front than to continue to provide financial support for a longer period of time, as usually Angel investors do. Investors with available funds can become seed investors for a new company, either through contracts for a private party or by entering the investor network.

role Investor Investor

Funds provided by Sememinvestor is usually referred toas seed money or seed capital. This type of investment is often useful in covering all costs associated with starting new business and covering other early phase costs. It is not uncommon for the investor to provide financial support in one one -off amount. At the same time, investors can provide some kind of instructions or help to develop the basic operating structure of business, provide contracts for transport and distribution of products, or even help in developing the company's website. Once the investor provides support promised at the beginning of the project, he usually withdraws from active involvement and is waiting to return the investment.

There are several methods that have become and found an investor of seeds. The Internet can provide more names and contact information for connecting seeds networks or find an investor to help start new business. Many Choos Entrepreneurs will work privately with investors and conclude legal contracts with the help of professionals such as lawyers and accountantwho may know people with enough money to become investors of seeds.

Possible benefits

Since the amount of investment is usually determined by a one -off contribution to a new business, the degree of possible risk is somewhat limited, which can be considered positive for this type of investment. In addition, seed investors contribute to new companies in early stages, not for a long time. This allows you to go to other businesses that show the promise that they will get a return rather than continue the age of time and resources to a single project.

Possible disadvantages

Investments made only in the early stages of the company often bring less return than investing in risk capital that spread over time. Most often it is a seed capital is one of the first debts that are settled when the company begins to generate revenue. One way to maximize return is to accept shares in a company rather than required to repaySeed capital plus a certain interest rate. Assuming that the company successfully launches on the market and builds a fixed client base in a reasonable period of time, the ownership of shares in the company can bring long -term benefits for the investor's seeds, while still requires little or no other investments after these first stages.

Seed versus Angel Investor

While the investor of seeds contributes to the company's financial only during the initial period, the angel investor can provide contributions to the company, support the already established company or both. Compared to seed investors, angel investors who continue to invest money in the company within a few months or a fucling business contribution. In most typical cases, investors of seeds tend to invest less amount of money than the Angels Investors, because starting companies may require a minimum of $ 50,000 in the US (USD) while investing over the years, as many angel investo doRů, it can require anywhere from $ 300,000 to $ 5 million.