Seed Capital Financing Example

He is called seed capital financing, seed funding or Seed capital, to the financing or investment that is made from the beginning of the project of a company.

It is the way in which the early or initial offer of shares of a company is called, acquiring part of it or the control itself.

As seed capital there may be participation of:

• Family
• Friends
• Small investors
• Angel investor

This seed capital is used to carry out market research, and it does not require a very high amount to be invested to be a seed investment, it can be done in small amounts

Example of seed capital financing:

A small fur business has been created by a family, and in order to start it needs a small investment to investigate costs and movements to be made.

The small investment or generating investment will be made by family members, who in total raised an amount of 20,000.00 (Twenty thousand pesos) that will allow the manufacture of leather articles and introduce them to the market to rectify the viability of the business.

As the amount is very small, shares were created so that they can be sold as a risk investment, and in this way get enough machinery to increase the manufacture of parts.

For the purchase of shares, a total of 250,000.00 (two hundred and fifty thousand pesos) was raised, which will be invested in machinery, material and the hiring of workers.

After six months, the company began to bear fruit and the dividends were enough to be able to request a formal loan and move forward with the company.