Seed Investors Meaning – Definition

Seed investors are accredited investors that participate in seed rounds. This term does not really describe friends and family that often invest at the seed stage.

Most seed investors happen to be angel investors, but there is a minority of VC firms that do also invest at the seed stage of a company or startup.

Best way to clarify the seed investor meaning is through short Q/A:

How much equity do seed investors get?

In a seed capital round, founders give to the seed investors around 10-25% of the startup.

How do seed investors make money?

Every now and then, one of the startup succeeds in reaching a liquidity event, such as an IPO or acquisition. Thus investors in general can sell part or all of their portion of ownership in the company during such events, or even sell the stocks when the company is publicly traded.

What is the difference between seed and angel investment?

Angel investors can invest at the seed round stage, but they can also invest at later stages.