State Whether the Following Statements are True or False.Q.Seed capita...
- The term seed capital refers to the type of financing used in the formation of a startup.
- Funding is provided by private investors usually in exchange for an equity stake in the company or for a share in the profits of a product.
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State Whether the Following Statements are True or False.Q.Seed capita...
Seed capital finance refers to the capital required by an entrepreneur for conducting research at the pre-commercialization stage. This statement is true.
Explanation:
Seed capital finance, also known as seed funding, is the initial capital or funding required by an entrepreneur or a startup to support the early stages of a business or project. It is typically used for research and development purposes, which includes conducting research at the pre-commercialization stage.
Here are some key points to further explain the statement:
1. Seed capital: Seed capital is the initial capital investment provided to a startup or entrepreneur to support the development and growth of their business. It is usually the first round of funding that a startup receives.
2. Research: At the pre-commercialization stage, entrepreneurs often need to conduct research to validate their business idea, develop prototypes or minimum viable products (MVPs), and assess market demand. This research is crucial to refine the product or service and gain insights into the target market.
3. Pre-commercialization stage: Before a product or service is ready to be launched into the market, it goes through various stages of development, including the pre-commercialization stage. This stage involves refining the product, conducting market research, and developing a go-to-market strategy.
4. Capital requirement: Conducting research at the pre-commercialization stage requires financial resources to cover expenses such as hiring researchers, purchasing equipment or materials, conducting surveys or market studies, and analyzing data. Seed capital finance provides the necessary funds for these activities.
5. Purpose of seed capital finance: The primary purpose of seed capital finance is to support entrepreneurs in the early stages of their business when they may not have sufficient personal funds or access to traditional sources of financing. It enables them to conduct research, develop prototypes, and validate their business idea before seeking further investment.
In conclusion, seed capital finance refers to the capital required by an entrepreneur for conducting research at the pre-commercialization stage. It plays a crucial role in supporting startups and enabling them to refine their ideas, develop their products, and prepare for commercialization.
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