The funding used to get a new business started. As the word "seed" suggests, this relates to a very early stage of financing. This initial funding often comes from the founders' personal assets, friends or family, and is used for funding initial operating expenses. It is rarely provided by lenders or institutional investors because startup is considered to be the riskiest stage in a company's lifecycle, and has the highest chance of failure (but because of the early stage of investment, it can also have very substantial rewards). This type of funding is often obtained in exchange for an equity stake in the enterprise.

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