Seed capital is a form of financing that is typically used in the early stages of a new business project or start-up and this form of financing is typically used for market research, product development and proof of concept.
For South African entrepreneurs who have a business idea and are looking to develop this business idea into a reality then you’ll require enough seed capital to see the project through. Typically funding for seed capital is provided by the entrepreneur themselves, friends or family or outside investment.
If you personally lack the funds for your seed capital then you may need to look for investors in South Africa that are interested in funding your business idea. Seed capital is typically used to help start a business, and the level of seed capital is normally enough to get the business off the ground to the point where it is either self sufficient, or the concept of the business is developed to the point where it is proven as a concept and where other investment will likely be gained to push the project to the next stage.
It is important to give a lot of thought about the level of funding that you require for your new business project. If you require seed capital to help develop a product then you’ll find that investors in South Africa will likely only fund a certain amount of money for your project as these types of business concepts can be risky. Therefore you’ll most likely only be able to raise money in the tens of thousands bracket and not more. If you do require much more money to prove your concept then you may need to think again on how you are going to raise this money.