We are sometimes approached by promoters wondering what exactly is considered seed capital when it comes to funding a project. Briefly summarized, seed capital is the investment of funds that serves to start a business by people related to the entity (i.e. its owners or their relatives).
In the context where the entity is ready for additional funding, the seed capital is commonly referred to as the money invested.
Seed capital usually comes from the new entity management or from family and friends that believe in the perceived value of the project. The seed capital comes from these related sources not only because the initial amounts are small but the risk is much greater than a capital firm or bank may be willing to invest.
Of course seed capital does not always need to come from management staff or their relatives. Sometimes, it can come from an third party investor.
Make sure that whatever decision you make, it is an informed one.