Seed Round — what is a seed round?

Definition

Seed round (seed round, seed funding round) is one of the first formal funding rounds for a startup. The goal is to raise capital to build the product, acquire first customers and prove the business model (product-market fit).

Quick Answer

A seed round is one of the first formal funding rounds for a startup, raised to build the product, acquire first customers and reach product-market fit. In Poland it typically raises 500k–5M PLN from angels, VCs or crowdfunding, against a pre-money valuation of 2–10M PLN, with investors commonly taking 10–25% of the company. Money funds the team, product, marketing and 12–18 months of runway. Deals use equity, convertible notes, SAFEs or subscription warrants, often with liquidation preference, anti-dilution and founder vesting terms.

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Seed vs pre-seed vs Series A

What does a startup spend seed money on?

• Team — hiring first programmers, salespeople
• Product — developing MVP into a full product
• Marketing — acquiring first customers
• Runway — securing 12-18 months of operation

What does a seed round look like?

Valuation

The startup sets a pre-money valuation (value before investment). In Poland, typical seed valuation is 2-10M PLN.

Example:

• Pre-money valuation: 4M PLN
• Investment: 1M PLN
• Post-money valuation: 5M PLN
• Investor share: 20%

Instruments

• Equity — direct purchase of company shares
• Convertible note — loan convertible to shares in next round
• SAFE — Simple Agreement for Future Equity (popular in US, increasingly common in PL)
• Subscription warrants — Polish legal tool

Typical terms

• Liquidation preference — investor recovers money first at exit
• Anti-dilution — protection against dilution in subsequent rounds
• Founder vesting — yes, VCs require vesting from founders too
• Board seat — seat on supervisory board

How to prepare for seed round?

1. Pitch deck — 10-15 slides (problem, solution, market, team, traction, ask)
2. Financial model — 3-5 year projections
3. Traction — revenue, users, LOI (Letter of Intent)
4. Data room — legal documents, company agreement, KRS

How Freenance can help

If you're a founder or investor in a seed round, Freenance lets you track the value of startup shares as part of your wealth. You see what percentage of your portfolio consists of high-risk investments, and make better financial decisions.

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Related Articles

• Venture Capital — co to jest? Fundusz VC
• Jak inwestować w startupy w Polsce — crowdfunding, aniołowie biznesu

FAQ

How much money is typically raised in a seed round?

In the United States, seed rounds typically range from around $500k to $3M, though the upper bound has expanded in recent years as pre-seed and seed blurred together. In Poland, seed rounds are usually smaller in dollar terms — often equivalent to 500k-5M PLN — reflecting the local startup ecosystem and lower operating costs.

What is the difference between pre-seed and seed?

Pre-seed funds the earliest stage — typically MVP development and initial validation — and is often raised from founders, friends and family, or angel investors. A seed round comes once there is some traction or a working product, with the explicit goal of finding product-market fit. The amounts and investor sophistication differ accordingly.

What is a SAFE and is it valid in Poland?

A SAFE (Simple Agreement for Future Equity) is a US-originated convertible instrument popularized by Y Combinator. It is increasingly used in Poland but must be carefully adapted to Polish corporate law — many local deals still use convertible notes or subscription warrants (warranty subskrypcyjne), which fit the polish legal framework more cleanly.

What share of the company do seed investors typically take?

Seed investors commonly receive between 10% and 25% of a startup, depending on valuation and check size. Higher dilution can leave founders with too little equity for later rounds, while too little dilution may signal under-investment. The exact percentage is a negotiation between pre-money valuation and investment amount.

Is this investment advice?

No. This article is educational content about how seed rounds work and is not investment, securities, or legal advice within the meaning of Polish KNF regulations. Early-stage startup investing carries a high risk of total loss and should only be considered by qualified investors after consultation with licensed advisors.