Startup Capital

AAA

DEFINITION of 'Startup Capital'

Startup capital refers to the money that is required to start a new business, whether for office space, permits, licenses, inventory, product development and manufacturing, marketing or any other expense.


Startup capital is also referred to as "seed money."

INVESTOPEDIA EXPLAINS 'Startup Capital'

The money can come from a bank, in the form of a business loan; or from an investor, group of investors, or venture capitalist(s). In the case of a bank loan, the business will be expected to make monthly payments to pay down the debt plus any interest and/or fees. In the case of an investor, he or she will negotiate to provide that startup capital in exchange for a certain stake in the company.

RELATED TERMS
  1. Junior Company

    A small company that is currently developing or seeking to develop ...
  2. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  3. Alphabet Rounds

    The early rounds of funding for a startup company, which get ...
  4. Angel Investor

    An investor who provides financial backing for small startups ...
  5. Love Money

    Seed money or capital given by family or friends to an entrepreneur ...
  6. Seed Capital

    The initial capital used to start a business. Seed capital often ...
RELATED FAQS
  1. What are the pros and cons of operating on a balanced-budget?

    Few issues are more complicated, contentious and controversial in contemporary American politics than balancing the federal ... Read Full Answer >>
  2. How can you use a cash flow statement to make a budget?

    To use the cash flow statement to make a budget, a company needs to combine the operating cash flow portion of its cash flow ... Read Full Answer >>
  3. How does debt-to-capital change when a company issues new shares of stock?

    The debt to capital of a company changes when it issues new shares of stock by decreasing its amount of total debt in relation ... Read Full Answer >>
  4. What are the benefits for a company using equity financing vs. debt financing?

    Most companies use a combination of debt and equity financing, but there are some distinct advantages of equity financing ... Read Full Answer >>
  5. What's the difference between budgeting and financial forecasting?

    Budgeting and financial forecasting are financial planning techniques that help business personnel in the decision-making ... Read Full Answer >>
  6. What are the key differences between marketing and advertising?

    The key differences between marketing and advertising are based on how each term defines a separate function in the process ... Read Full Answer >>
Related Articles
  1. Professionals

    Top 5 Incentives For Student Startups

    If you can learn to juggle course work and cash flow, you'll be ready for anything.
  2. Entrepreneurship

    Business Startup Costs: It's In The Details

    Don't overlook the details when starting up a business. It's the small expenses that have the potential to make or break a great idea.
  3. Entrepreneurship

    4 Steps To Creating A Stellar Business Plan

    If you're going into business, you must have a plan. Find out how to put this important document together.
  4. Options & Futures

    Retirement Funds To Fund Startups

    Retired entrepreneurs who have "played it safe" and retirees who want to stretch their dollars are looking to invest here.
  5. Entrepreneurship

    What is Unlimited Liability?

    Unlimited liability means that the owners of a business are liable for the entire amount of debt and obligations of that business.
  6. Investing News

    The Funds Keep Flowing Into Indian Tech Startups

    Investors are increasingly turning their attention to Indian tech startup companies. Billions of dollars are flowing into the startup sector in India.
  7. Entrepreneurship

    The Story Behind Google's Success

    An ongoing commitment to innovation and rapid iteration drives Google's ongoing success.
  8. Entrepreneurship

    How To Profit From Solar Energy

    Once regarded as too expensive and inefficient, solar energy is now becoming a more viable option for consumers and businesses alike.
  9. Entrepreneurship

    New Battery Technology Investment Opportunities

    With the advent of mobile computing and electric cars, the importance of batteries for electrical power will continue to grow.
  10. Investing News

    Investing Early In The Future of Data Security

    Data breaches are becoming increasingly common. Among the foremost technologies paving the path for the future of data security is biometrics.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center