A seed round is the first formal fundraising stage for a crypto project. Seed investors provide capital at the earliest and riskiest stage of development, often before the product is built, in exchange for tokens at the lowest price point.
Seed round terms typically include the longest vesting schedules and lowest valuations, reflecting the high risk taken by these early backers. Common seed round vesting includes a 6-12 month cliff followed by 18-36 months of linear vesting.
The seed round valuation and allocation size are important factors in tokenomics analysis. Projects that raised large seed rounds at very low valuations may face significant selling pressure when those tokens unlock, as early investors sit on substantial unrealized gains.