Chapter 2 - Where Should I Look for Seed Capital?

Joseph W. Bartlett, Special Counsel, McCarter & English LLP, Co-Founder of VCExperts

McCarter & English LLP


Assuming a founder is content that his product is technically feasible and marketable; the chore of raising capital is paramount. The founder's problem is twofold: first, can the money be raised at all, and secondly, if the money is raised, is there enough money left in the deal for the founder. The sources of investment capital are numerous, ranging from commercial banks making fixed-rate, secured loans to individual investors (so-called angels) willing to provide risk-equity capital in hopes of a spectacular return down the road. A number of guidebooks list the types of capital sources a founder may use, and others specify the name, address, and telephone number of particular firms. The discussion in this chapter will concern: potential sources, the legal constraints, and some of the problems and opportunities involved in hiring capital for an emerging company.


Introduction to Venture Capital and Private Equity Finance