Role of Seed Capital Funds in the Enterprises' Financing Process
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The author describes the financial system that supports development of enterprises, especially microfirms and small business. One of the options is aid offered to entrepreneurs through seed capital funds. Seed capital funds are venture capital funds (VC) financing first stages of business activity, i.e. transformation of an idea into practice, preparation of the product and putting it on the market. Although there are over 30 private equity funds and venture capital funds, they do not show much interest in financing of embryonic and start stages of business activity. As it results from figures prepared by the Polish Capital Investors Association, just a small part of VC fund investments is granted to the smallest firms. Establishment and development of embryonic funds will become a significant element of support provided to the smallest innovative firms, thus supplementing the existing market of guarantee and credit services. However, one of the necessary conditions of development of those funds is to provide them with capital support.
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