What is seed funding?
Seed Funding is also referred to as Seed Capital or Seed Investment. It is the first round of funding a company goes through. The purpose of this round of funding is to make the company look attractive enough to investors to secure more funding in the future.
Where can I go to get seed funding?
There are several possibilities for a business start up to get seed funding, other than family or friends.
They include the following:
- Angel Investors: Accredited investors with high net worth and who wish to diversify their portfolios by investing in start-ups.
- Accelerator Programs- An accelerator is a fixed-term program designed to help select ventures grow through their nascent stages, usually ending with an event where the ventures showcase their product or service to investors. The role of an accelerator is to help startups design products or services, identify target markets, and obtain resources like capital and employees. A key component of an accelerator program is its short duration. In as little as three months, an accelerator is pressured to reach a stage that produces a viable product or service.
- Incubators- An incubator is a company that helps startups for undetermined periods of time, providing space to work and capital to use.
What is a general security agreement (GSA)?
A GSA will secure a loan for the party who signs it, by including the debtor’s representations, warranties, and covenants; a description of the personal property assets secured by the GSA; the terms and conditions of the GSA; and enforcement rights in the event of a default. Most financial institutions have their own preferred GSA form.
What is the function of the Personal Property and Securities Act (PPSA)?
The PPSA is based on a system where all security interests are registered, letting others parties know that the lender has rights over certain properties of the lender. A security interest is a right that a lender to take over certain property of the lender if the lender goes into default. When considering lending money to or going into a business with another party, it is advisable to search the PPSA, a searchable database to find out if the party has property that is free and clear of any third-party rights.
