Pre-Seed Funding
This is the very first step — when your startup is little more than an idea. Startups at this stage are typically focused on product development, refining their concept, identifying product-market fit, and often operate with a limited user base. At this point, the money typically can come from investors or close supporters such as friends and family. They ask for a percentage of your company in exchange for money.
For example: You and a friend want to start a football turf. You each put in your own money and split ownership 50-50. When that’s not enough, you raise money and give 10% to the investor who invests 10 lakh in your company.
Seed Funding
Once your idea starts taking shape, it’s time for seed funding — the first official round of investment. At this stage, there is visible revenue, growing traction through signups and user registrations, rising demand from vendors or enterprise clients, and a solid team with key personnel in place.
While support may still come from friends or family, angel investors often join at this stage if they believe in your concept. In return, they receive equity, meaning you’ll give up a small portion of your company.
For example, let’s say you need more funds to lay the turf or pay the rent. You find an angel investor who’s impressed with your idea and is willing to invest ₹30 lakhs in return for a 10% stake. You now own less of the company, but have the capital needed to move forward.
