What Is Seed Funding?

The so-called seed capital refers to the capital invested in the early stage of industrialization of technological achievements. Also called seed funding. Since seed capital entered earlier (actually the earliest of various investments), the risks are relatively greater, but the potential returns are also relatively high. From the perspective of industrialization of scientific and technological achievements, the role of seed capital is very important. It is precisely because of the emergence of seed funds that many scientific and technological achievements can be quickly industrialized and greater development can be achieved. This is the meaning of "seeds". Due to the high risk of seed funds and their important role in the transformation of scientific and technological achievements, many seed capitals are provided by the government, which is our common government seed fund.

Seed capital

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So-called

Seed capital generally has the following characteristics:

From the perspective of investment orientation and activity areas, the main areas of seed capital activities are small and medium-sized enterprises with high growth potential and high-tech content.

Since the emergence of seed capital in China is very short, the domestic business, financial and academic circles have not paid enough attention to the development of seed capital. At present, the focus of academic research is basically on government

In general, there are currently several types of seed capital that are common at home and abroad:

One

That is, investment funds established by the central government and local governments to promote the transformation of technological achievements. Generally speaking, government-funded

Hedge fund pioneer Michael Steinhardt has been criticizing hedge fund managers for being reduced to asset aggregators. In an interview with CNBC this spring, Steinhardt said that fund managers today seem satisfied that the return rate can outperform the broader market, and the real money is by expanding the size of assets and relying on management fees to survive. He said that today's hedge fund business is becoming a reward mechanism that encourages bigger funds rather than pursuing winning returns.

Some observers (or skeptical observers) believe that the introduction of seed investment by hedge funds will give investors the opportunity to participate in a mechanism that Stanhart dismisses but can bring high returns, so as to get a share of it . After all, as long as funds continue to flow in, the management fee model guarantees that even the most mediocre fund managers can make money. Who would refuse such a good thing?

The so-called seed investment, as you may hear, is the injection of early capital. Hedge fund seeds are large enough to help a fund manager get started; and some seed investors also provide referrals, risk management, and back-office assistance. If the investment comes from a well-known company-such as Larch Lane, Reservoir, Protégé, Blackstone or SkyBridge-then it is no different than an early success centering pill.

Hedge funds that receive seed investment are a bit like indentured slaves. Seed investors provide funds and assist in referrals, and may sometimes bring a good reputation to hedge funds. In return, investors will receive equity in hedge funds and some fund management fee income within the agreed time.