Definition
Seed Round
A seed round is the first significant equity funding a startup raises to build its product, hire a core team and find product-market fit.
Seed funding comes from angels, seed-stage venture funds, accelerators and micro-VCs. The money is used to develop the product, acquire early customers and demonstrate enough traction to attract a Series A. Seed rounds may be priced equity rounds or done via convertible instruments.
In India, seed rounds have grown in size as the ecosystem has matured. A startup typically gives up a meaningful equity stake at seed, and the round sets up the cap table that later investors build on.
Related terms
- Pre-Seed RoundA pre-seed round is the earliest external funding a startup raises, often to validate an idea before a product exists.
- Series ASeries A is a startup's first major priced venture round, raised once it has product-market fit and is ready to scale.
- Cap TableA capitalisation table (cap table) is the record of who owns what in a startup — every shareholder, option holder and convertible, with their stakes.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.