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Definition: Seed capital

Christina Hernandez Sherwood, eMed Editor, MedCity News

Definition: Seed capital

Seed capital is the initial funding used by a healthcare entrepreneur to launch their startup. While seed capital often comes from bootstrapping and friends and family, other sources of this funding can include government and foundation grants and accelerators and incubators.

Though usually a small amount of money, seed capital is important to startups. This funding enables entrepreneurs to validate their business model, begin to form a team, and develop the initial product or service. These early steps help young companies attract future investors, such as venture capital firms and angel investors.

Related: Funding Sources for Life Science Startups

Photo by Tax Credits

Definitions are a weekly feature on eMed for current and aspiring healthcare entrepreneurs.

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