Seed funding

Is it considered usual to be reimbursed of money spent when receiving a seed investment?

Anonymous

Last updated on August 29th, 2017

If it is not usual, who covers this cost ? What is the common practice?

Raymond Williams Software Developer at Vista Entertainment Solutions USA

September 5th, 2017

That sounds unusual, but it depends on the agreement between the parties. This sounds like a 'red-flag' to me, because future investors may potentially see it as a barrier for receiving back their own investment. I.e. the seed investor gets priority before they do, which investors do not like.


An investment is usually made with the idea that the ownership received will be worth more with the success of the company. If there is a 'reimbursement' then maybe you'er looking for debt which would have a pay back period and is significantly different than equity investment.

S Sailesh kumar Intrepreneur @ Cycloides Inc,Tech-Consultant, Ex- Head of Marketing @Scopeweaver & SM Influencer

September 21st, 2017

DONT DO IT...NEVER...

Only way someone invests in you is because you believe in it. You have to have your skin in the game for the investors to trust you. Even if you get your seed funders to pay you that, you will not attract any next A,B,C...rounds of funding for the very basic reason. If you truly believe in your Idea you will make your money after sometime.

Yann ESSOH Founder, Telecom & Ecommerce Business development manager

September 21st, 2017

Money