The initial capital used to start a business, often from friends and family, is called seed capital.
Seed capital is among the earliest money a new venture receives. It may fund product development, market research, incorporation costs, early employees, prototypes, or initial customer testing—often before the company has dependable revenue or a finished product.
The money can come from founders’ savings, relatives, friends, angel investors, accelerators, crowdfunding participants, grants, or seed-focused venture funds. It can be invested for shares, provided through a convertible note or SAFE, or supplied as a grant or loan. The financing method affects ownership, repayment obligations, and future dilution.
Seed capital is earlier and usually smaller than Series A or later growth financing. “Bridge capital” is temporary funding between larger rounds, while “mezzanine capital” generally supports more mature companies. “Growth capital” is used to expand an established operation, so none of those terms best describes a business’s initial launch funding.