Seed capital is another term for initial capital. It is the starting fund that a business uses to start business operations. These funds primarily comes from a company's founders or venture capital. On an investment perspective other than the business' founder, it is a high risk investment since most start-up companies will not generate revenues for a few years. However, once a good company is in place, tremendous gains can be achieved since acquiring a huge chunk in the business can be availed at a relatively low price.