Seed Money Definition: Money that initially starts a new business. The National Institute of Health’s (NIH’s) and National Science Foundation’s (NSF’s) Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) programs are a major source of seed funding in the United States. The government does not take any ownership of the business in return. Other seed investors often gain a stake in the business as a result of seed funding the start-up.
Universities often provide earlier seed money, ranging from department research funds to competitive university-wide start-up funds. These funds help provide preliminary data that supports an SBIR or other research application. Associations supporting life sciences entrepreneurship, women in science, or finding a treatment for a particular disease also may be willing to support the development of a good idea with seed money.
Examples of Businesses Started with SBIR Funds
Did you know that these businesses had early funding from SBIR?
- 23 and Me
- The Mars Rover
- (Some) COVID Testing