Seed Financing Round

Seed Financing Round

Also sometimes referred to as a friends and family round, an early round of financing for a startup company, typically conducted not long after the company is formed. Startups may raise debt and equity capital in multiple rounds of seed financing before they successfully complete a Series A Financing Round led by an institutional Venture Capital fund.
Seed round structures are intended to enable a company to raise equity or debt capital with reduced transaction costs (such as lower legal fees) and a shorter time-to-close, compared to a traditional VC financing round.
Typical seed round investors include:
  1. Friends and family
  2. Angel Investors
  3. Super-angels.
Typical seed round investment instruments include:
  1. Convertible notes.
  2. Simple agreements for future equity (SAFEs).
  3. Series Seed preferred stock.
  4. Common stock.

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