Angel Investing almost always requires a shareholder pact between the founding group and new investors. When considering or developing a proposal, keep in mind the following essential points: there are three main vehicles for seed financing: convertible borrowing, SAFE and the issuance of preferred shares. It is best to determine which technique would be best for a given start-up, after consultation with the Council. The third frequently used seed financing technique is to issue a cycle of preferred shares. Preferred shares can be attractive to investors because they give investors more rights within the company than common shares. These fees include: traditionally, companies that do not yet meet the listing requirements or qualify for bank credit recognize VCs as providers of financial support and value-added services .  Seed money can be used to finance pre-operations such as market research and product development. Investors can be the founders themselves, along with savings and credit. You can be family members and friends of the founders. Investors may also be external angel investors, venture capitalists, accredited investors, participatory investors, income-based lenders or government programs. The term “seeds” means that seed capital is a start-up investment. Seed Capital supports the company until it can generate money or until it is ready to invest more. This is often a small amount, since business is still in the idea or conceptual phase.
Because a seed capital investment is such a high risk, this type of financing is often exchanged for a stake in the company, although with less formal contractual overhead than standard equity financing. Seeds are often used to finance a company`s preactivity, such as research and development. This is the most selective method of financing. Public funds can be used for young people, with the age of the founder being a determining factor. Often, during the summer holidays, these programs can be geared towards the autonomy of young people. Depending on the political system, the municipality may be responsible for small payments. The European Commission implements microfinance programmes (loans of less than 25,000 euros) for the self-employed and companies with less than 10 employees.  European seed capital is available, but it is generally limited to a 50% share.
 European SMEs can often benefit from the Eureka programme, which brings together SMEs and research institutes such as universities. Government programs are often linked to policy initiatives.  [Quote required] Your conversation with angels (even passive ones) does not end at the end. Regardless of the actual conditions of the shareholders` pact, it is worth recognizing that the quality of a founder`s personal relationship with his investors informs the tone of corporate governance. Seed money can also come from crowdfunding products or financial bootstrappings, instead of a share offer.  In this context, bootstraping means using the cash flow of an existing business, as in the case of Chitika and Cidewalk.