A seed round is a startup's first formal institutional funding round, typically from angel investors, seed-stage VCs, or accelerators. The capital is used to build the initial product, hire a small team, and prove enough traction to attract a Series A.
Seed rounds in India typically range from ₹1 crore to ₹25 crore, at valuations of ₹5 crore to ₹150 crore. The round is usually structured as equity (ordinary or CCPS) or as a convertible instrument (SAFE note or convertible note).
Why it matters for unlisted shares
The seed round sets the first formal valuation on a company's cap table. Early seed investors who sell in the secondary market represent the deepest discount from current valuation — understanding the seed price helps you gauge how much the company has grown since inception.
Example: A SaaS startup raised ₹5 crore at a ₹20 crore seed valuation; by Series B it was valued at ₹800 crore — 40× the seed price in 4 years.