The Seed Stage is the phase in which founders focus on transforming an idea into a viable business concept by conducting initial market research, defining the value proposition, building a prototype or minimum viable product (MVP), and assembling a core team; funding at this stage typically comes from the founders themselves, friends and family, or small angel contributions, and is used primarily to validate assumptions rather than scale operations, making it a high-risk, concept-validation phase that precedes more structured financing rounds.
During the Seed phase the risk is the extremely high, as the whole investment can be easily lost, thus the valuation is the second lowest. Only investors who can afford a total loss should be considering this phase.
