While angel investors and the venture capital sector are tightly wound, organized and highly identifiable, seed funding is viewed as the Jan Brady of business investment.
It’s why the Philadelphia-based National Association of Seed and Venture Funding (NASVF) has hooked up with Temple University’s Fox School of Business to study seed funding–typically funds from family, friends or others used to pay for a start-up’s preliminary expenses like market research and product development–and professor of strategic management Raj Chaganti has plenty of questions he’d like to see answered.
“We’re trying to fill a void here,” says Chaganti, who has been at Temple since 1981. “There’s a big black hole here and nobody’s been able to put a spotlight on it. There are lots of associations around venture and angel capital, but seed capital is like a middle child, much neglected.”
Chaganti points out that while VC and angel investors are highly concentrated in certain geographies, seed investors are more scattered and there’s no sizable database. Also, a lack of regular data reporting has created a dearth of projections in the seed funding market. Information from six months prior, Chaganti says, isn’t very helpful.
“We need to provide a signal on a quarterly or semiannual basis so people can seek out the supply,” he says.
The deadline for the study’s first round of surveys is next week and findings will be presented on Sept. 14-16 in Oklahoma City at the NASVF’s annual conference. Chaganti plans on surveying NASVF members, among other seed investors, on a quarterly basis.
Source: Raj Chaganti, Temple University’s Fox School of Business
Writer: Joe Petrucci