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seed
capital .
Seed
financing or seed money used for the early investment
in a project or startup company, for proof-of-concept,
market research, or initial product development.
Tends
to be the next source of investment after the Business
Angels have chipped in.
A
typical selection criteria for London seed capital
investors has to meet all the following points:-
1. The company is an SME (less than 250 employees
and net worth less than £5m)
2. The business of the company is operated in England
3. Its investment is at least matched by business
angel investors 4. The total equity investment in
the round is less than £400,000
5. It is investing on terms that are at least as
favourable as the business angels.
6. Located in the London or Home Counties region
of UK
7. High growth, i.e. scalable business model with
a strong USP and highly ambitious management seeking
an exit (flotation or trade sale) within three to
five years
8. A product or service that can be taken to market
without further development (i.e. past the initial
concept stage)
9. Some validation within the market place, either
through Value Added Resellers/partners or through
actual sales
10. An up to date and comprehensive business
plan, including executive summary, is available
11. Strong management team with skills to grow business
in line with projections
12. Significant commitment to venture already demonstrated
by management, preferably cash. Management prepared
to discuss conversion of any existing loans to equity
and ideally investing in this round
13. Cash being raised will last the company at least
12 months
14. Realistic pre-money valuation
15. Prepared to accept syndicates of angel investors
with part time representation on board
16. Independent company, i.e. not a subsidiary -
more than 30% owned by another company
In
short, they will jump on the back of a project that
other, approved, Business Angels have had the courage
and acumen to fund so long as they can cut the same
deal.
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