When entrepreneurs are looking to secure capital for their business, the first two rounds of funding usually consist of Seed Capital and Venture Capital.

Seed Capital - The first stage of investment for entrepreneurs is usually Seed Capital. This is the preliminary funding that is used to help establish the brand. Most people will use their own savings, or borrow funds from family and friends. Some larger ideas may require angel investment, but in many cases the business has not actually been established yet and is therefore a high risk investment. At the same time, angel investors like to invest seed capital if the idea is right, as they will usually take a percentage of the business, which could amount to a decent return if all goes well.

Venture Capital - When companies start up, they often need further financing to expand. This is where Venture Capital comes into play. This is a private investment that usually comes from a group of investors, generally buying a percentage of shares in the company, often known as a limited partnership.

New businesses that have gone past the preliminary stages and are in full operation, may still have trouble securing bank loans, and thus seek out angel investors and venture capitalists. Because this is a high risk investment, venture capitalists usually play a role in the company's key decisions, and often become a partial owner of the company.

In return, since these investors tend to make investments in a market sector that they are interested in, they often have contacts and experience which adds value to their offer.

Raising Seed or Venture Capital - The New Zealand Investment Network connects local entrepreneurs with angel investors, and can help raise either seed or venture capital, depending on which stage your business is at. We are an online community that gives entrepreneurs the ability to reach potential investors from New Zealand and countries around the world.