Which of the following is not a form of seed capital?

• A. Personal savings
• B. Family loans
• C. Bank loans
• D. Friends' investments

Answer: (C)

Seed capital refers to the initial funding used to start a business, and it typically comes from personal networks or individual sources rather than institutional financing. Personal savings, family loans, and friends' investments are all examples of informal funding sources. They generally involve individuals who know the entrepreneur personally and are willing to invest based on their relationship rather than a rigorous evaluation process. This type of funding is often accessible to entrepreneurs looking to launch their ventures in the early stages.

On the other hand, bank loans represent a more formal means of financing. They require a business to present a detailed proposal, demonstrate creditworthiness, and comply with specific repayment terms. This structure is not characteristic of seed capital, which is typically more flexible and provided based on personal trust and informal agreements rather than the formalities associated with bank lending. Therefore, bank loans do not align with the essence of seed capital, making the identification of such funding crucial for aspiring entrepreneurs.