Good Seed, Bad Seed: What’s the Difference between Activist and Passive Seed Funding?

With more and more funding options being made available to entrepreneurs (angels, accelerators, and micro-VCs, oh my!), it’s important for startup companies to be able to differentiate and assess their options accordingly.

As Jeffrey Bussgang writes in a post for his Seeing Both Sides blog, one important distinction they need to recognize is the difference between Passive Seeds and Activist Seeds.

While passive seed funding programs value quantity over quality and typically treat funding as “an option to participate as a more meangingful investor in the future,” Bussgang argues, activist seed VC investors make the same kind of full time commitment of time, resources, and energy they would provide a Series A company. They become actively involved and offer value-added services to help the startup succeed. As such, they’re also often much more selective with their funding. For more on the differences between passive and activist seeds, and the factors your startup should take into consideration when choosing a VC, read the full post here.

Related Content from OpenView:

Seed funding shouldn’t be taken lightly. See this post for more on the concerns some critics have with passive seed VCs and “spray and pray” investment strategies. And for more general tips for founders considering seed funding, read this post from the OpenView Blog.

photo by: Bruce Guenter

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