Seed funding is usually known as the "friends and family round" of venture capital fund-raising, since it is usually a small pool of capital a business uses to develop products or services or support operations.
There are few grants for private start-ups, outside of Y Combinator and other notable "seed" incubators or accelerators. Most U.S. federal grants are for nonprofit ventures.
Private Seed Grants
Though the federal Small Business Agency states that it does not provide grants to small businesses, there are private-public "grant distribution institutes" in the form of small business investment companies, or an SBIC.Furthermore, the SBA indirectly invests in these firms by matching investment commitments to lower the risk for investment companies.
The National Association of Small Business Investment Companies (NASBIC) has a directory of potential investors. The related National Association of Investment Companies (NAIC) has a mission profile targeted at developing an ethnically diverse marketplace, and does so by investing in companies whose ownership and hiring practices reflects this intent.
To utilize these resources, access the directory under "Find an SBIC" and contact a registered SBIC investor.
Private Non-Profit Seed Funding
Private institutes such as the Heineman Foundation often invest as much as $50,000 per annum in nonprofit businesses. The Heineman Foundation, in particular, is targeted at specific goals. In the foundation's case, nonprofit businesses geared towards environmental research or improvement are best qualified for its grants, along with child development and the preservation of music and culture. To qualify, access Heineman's application process online and supply the relevant information.
Similar investment companies can be found through online databases such as the Foundation Directory Online or Guidestar.
Government Grants for Non-Profits
The U.S. government provides more than $360 billion in grant money to businesses and projects through its database at grants.gov and fedgrants.gov. An email listing is also available for subscribers to stay on top of grant opportunities; registration for the email alerts is free.
To apply for grant money, register with grants.gov, log in, and choose the "Apply for Grants" tab to get started.
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