Legal Definitions - seed money

Seed money is the initial funding that a business venture receives to get started. It is also known as front money or front-end money. This money is used to cover the initial expenses of starting a business, such as product development, market research, and hiring employees.

• A group of friends who want to start a new tech company might pool their resources to provide seed money for the venture.
• A small business owner might use their personal savings as seed money to launch a new product line.
• A non-profit organization might receive seed money from a foundation to start a new program.

These examples illustrate how seed money can come from a variety of sources, including personal savings, investments from friends and family, or grants from organizations. Without seed money, it can be difficult for a new business to get off the ground and attract additional funding.