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The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own (see cash flow), or until it is ready for further investments. Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding. [1]
A pre-seed or angel round is the earliest infusion of capital by founders, supporters, high net worth individuals ("angel investors"), and sometimes a small amount of institutional capital to launch the company, build a prototype, and discover initial product-market fit. [3]
The business model is based on generating venture-style returns, not rent, or fees for services. Seed accelerators do not necessarily need to include physical space, but many do. The process that startups go through in the accelerator can be separated into five distinct phases: awareness, application, program, demo day, and post demo day. [3]
Y Combinator interviews and selects two batches of companies per year. The companies receive a total of $500,000 in seed money as well as advice and connections. The $500,000 in funding is made up of $125,000 on a post-money SAFE in return for 7% equity and $375,000 on an uncapped SAFE with a "most favored nation" ("MFN") provision (i.e.: "we get the same best terms you give anyone else in the ...
Seeded with an initial deposit: Every newborn should receive a modest but significant start-in-life deposit. Configured to establish lifelong assets: Savings should be held until at least age 18 and should be used for only higher education/training, small business development, home purchase, or retirement.
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