Swiss Private Equity & Corporate Finance Association
Schweizerische Vereinigung für Unternehmensfinanzierung
Association Suisse des Investisseurs en Capital et de Financement
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Seed Money

A seed round, sometimes known as a friends and family round, is a securities offering whereby one or more parties that have some connection to a new enterprise invest the funds necessary to start the business. Seed money refers to the money so invested.

Seed money is typically used to pay for such preliminary operations as market research and product development. Investors are often the business founders themselves, using savings, mortgage money, or funds borrowed from family and friends. They may also be outside angel investors, venture capitalists or accredited investors who are acquainted in some way with the founders. Seed capital is not necessarily a large amount of money. Many people start up new business ventures with CHF 20,000 or less. Overall, it amounts to some 30 million Swiss francs per year or less than 0.1 per cent of the Swiss GDP.

Seed money can be distinguished from venture capital in that venture capital investment tends to involve significantly more money, an arm's length transaction, and much greater complexity in the contracts and corporate structure that accompany the investment.

Seed money may come from financial bootstrapping rather than an offering. Bootstrapping in this context means making use of the cash flow of an existing enterprise. Other means of raising seed money include purchasing second-hand equipment rather than new or leasing rather than buying; paying sales people or agents on commission rather than having people on the payroll; or otherwise deferring expenses.

Availability of Seed Money in Switzerland

 Network of Business Angels in Switzerland

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Swiss Private Equity & Corporate Finance Association
Grafenauweg 10
Postfach 4332
6304 Zug

Phone: +41 41 724 65 75