Seed finance is known as the initial funding that is used to start a business. This is funding that is often obtained from assets or borrowings that come from the owner of the company. However, there is more to this as it is considered to be a critical time whereby businesses need to prove that their service or product work prior to offering it to customers. Additionally, the finance can also be obtained through private investors and is commonly done in exchange for an equity stake in the company.

New companies struggle to access the funding that they require, while banks and other investors might be reluctant to invest as the company has no prior history. As a result, business owners often have to turn to friends and family to access this funding. However, more resources are becoming available and this is because there are many different startup schemes available as well as other forms of financing. This is the earliest stage of the process of raising capital and is usually required to help the business operate in its earliest stages. As a result, it is often used for market research or product development.

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