A seed investor is an individual or a firm that invests money in startups during their seed-stage, which is the earliest stage of development, typically before startups have a fully developed product or a stable customer base. Seed-stage funding is often the first investment that a startup receives, and it is usually used to fund product development, market research, and hiring key personnel.
Seed-stage investors are typically high-net-worth individuals, angel investors, or early-stage venture capital firms. They are willing to take on higher risk in exchange for potentially higher returns, as startups at this stage are often highly speculative and unproven.
Seed-stage investors usually provide funding in exchange for equity in the startup. The terms of the investment are often negotiated on a case-by-case basis, but seed-stage investors generally receive a percentage of equity in the startup, typically between 5% and 20%.
In addition to providing funding, seed-stage investors often provide valuable expertise and advice to startups. They may have experience in the industry in which the startup operates, and can help guide the startup through the early stages of development.