Initial/Seed Venture Capital Key Terms

Familiarize yourself with these important initial/seed venture capital key terms for better business practices

Initial or "seed" venture capital, also referred to as "early stage" venture capital, is essential for start-up businesses that need funding to propagate early business growth. Seed venture capital can support staffing needs, project management or marketing research.

To attract venture capital investors that offer seed venture capital, a business needs a solid business plan. Venture capital consultants can help small business owners with business plan formulation and can pinpoint the best venture capital opportunities to meet specific needs. As you research venture capital possibilities, know these initial/seed venture capital terms to ensure you have a strong grasp on the industry.

 

Seed venture capital investors

Seed venture capital investors provide funding for start-up businesses that have a high potential to turn a profit. Along with initial capital funds, seed venture capital investors also provide management assistance and resources to spur success within a budding company.
Try: Read about the Santa Barbara Technology Group as an example of seed venture capital investors.

Venture capital consultants

Venture capital consultants are professionals that can help a business find and secure potential industry-specific venture capital. Venture capital consultants can help formulate a business plan that is appropriate for seed/initial venture capital funds.
Try: Learn about the role venture capital consultants have in the industry at VCC.

Business plan

A business plan is an organized and concise plan that provides potential venture capital investors with pertinent information about the company and about the plans for the requested venture capital funds. Business plans can also forecast the return that a venture capital investor can expect from investment in the company.
Try: Business Plan Master offers extensive information on business plans for venture capital.

Risk capital

Risk capital refers to capital allotted to a new company that has great earning potential, but still has risks associated with it.
Try: For extensive information on risk capital, visit BusinessFinance.com.

Drive-by deal

A drive-by deal refers to venture capital that is invested in a business only to be removed a short time later. Venture capital investors use this technique to avoid loss and to facilitate a quick exit from financial ties to the company.
Try: Investopedia.com provides more information on drive-by deals.

Benchmarks

Benchmarks are goals set by the venture capital investors that the company must meet. Benchmarks that are met can help a company secure further venture capital funding.
Try: Funding Post offers more information on benchmarks.

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