What is the primary business activity during the Seed capital phase?

The primary business activity during the Seed capital phase is developing a prototype. This stage is essential for entrepreneurs as they focus on turning their business idea into a tangible product or service. Seed capital is typically used to fund early-stage activities, including market research, initial product development, and refining the business model.

Developing a prototype allows startups to validate their concept, test its viability, and make necessary adjustments based on feedback. This phase is crucial because it establishes the groundwork for future rounds of funding as entrepreneurs seek additional capital to further develop their offering and bring it to market.

In contrast, finishing the prototype, establishing in the marketplace, and preparing for an initial public offering (IPO) are all steps that occur after the Seed capital phase. Finishing the prototype would generally fall under later stages of development where the initial concept has been validated and refined. Establishing a product in the marketplace requires comprehensive testing and marketing strategies, which typically follow the Seed phase. Lastly, preparing for an IPO is a stage that happens when a company is more mature, looking to raise significant capital by becoming publicly traded, long after the Seed capital phase is completed.