START-UP CAPITAL OR “SEED MONEY” GUIDELINES
2014-15
If you are a New / Restarting VE firm of an Existing VE firm and have no Common Stock, the following
scenario is meant to simplify the process of attaining start-up capital:
 The central office or business partner will provide “seed money” (an initial investment
depending on certain parameters) in exchange for common stock. Firms would then use that
money to purchase their fixed assets from the open market or from the utility set up by VE
through the wholesale marketplace and might have some money left for initial operations.
 Seed money will be deposited into firm bank account in exchange for shares of common stock at
$10 Par Value.
 The stock will be valued at $10 per share and there would be a maximum investment amount
to be determined using the discretion of the regional director.
If you are an Existing VE firm and have Common Stock, the following scenario is meant to simplify the
process of attaining start-up capital:
 The firm will follow the above guidelines to add this as additional shares of Common Stock that
you already have.
 Seed money will be deposited into firm bank account in exchange for shares of common stock at
$10 par value.
 The stock will be valued at $10 per share and there would be a maximum investment amount
to be determined using the discretion of the regional director.
How to Account for “Seed Money”
When your request is approved, you will receive a deposit of funds in your bank account. This amount
should be recorded in the cash journal as a cash receipt and reflected in the cash budget. It should also
be reflected in the balance sheet (added to Assets – Cash, and added to Stockholder’s Equity – Common
Stock).
 For all New/Restarting firms and Existing firms with no Common Stock: This amount of money
becomes the value of your Common Stock (for example, if you are given $200,000 in seed
money, you will have issued 20,000 shares of common stock at a $10 par value for a total value
of $20,0000.
 For Existing firms with Common Stock: You will simply add this as additional shares of Common
Stock (for example, your balance sheet from last year shows $90,000 of common stock and you
were given $200,000 in seed money. The value of your common stock is now $290,000 and you
will have issued an additional 20,000 shares at $10 par value for a total of 29,000 shares of
common stock outstanding at a total value of $290,000.)
The advantage of this type of startup means the central office can standardize the practice and firms
have the leeway to use the start-up money as they see necessary. Firms will not be given an amount
that would negate the need to apply for a loan. It would remain in the regional director’s discretion
to determine the amount of seed money granted to new firms. All Firms must submit a written
rationale for their business idea and a list of fixed assets that may be covered by this “seed” money.
The money is NOT to cover everything for the entire year, such as inventory...However, it may cover
up to 3 months of one-time expenses, like inventory, not covered by the loan. This amount should be
under $1,000,000 for a start-up company, if possible.
START-UP CAPITAL OR “SEED MONEY” REQUEST FORM
2014-15
Company Name: __________________________________________

______New/Restarting/Existing with no Common Stock

______Existing Firm with Common Stock
List basic Products and/or Services:
List all one-time purchase items with their costs below:
Amount of Start-Up Capital/Seed Money Requested: ______________ (not to include payroll
{use Business Contract} or monthly office costs like rent, utilities, etc. {use Loan Form})
Rationale for the Request of Start-Up Capital/Seed Money (Use additional page if needed):