Your answer should depend on the current stage of your company, nothing else. It is used to show the viability of your concept, to determine if your product can be produced in volume and sold at a profit. It also might be used to conduct studies to show the strength of your potential market. Some funds might be used to build some demonstrator models for the marketing research. This capital is generally the highest risk and most difficult to acquire.
Typical sources are state and regional seed funds.
It would be very wise to use a significant amount of this capital to show the strength of the market and acquire testimonials from users. You should also have a strong management team in place. If you have sales, they're probably minimal, and profits are months away. Start-up capital is generally used to launch a significant marketing effort for your product or service, as well as provide the facility to fulfill orders promptly. This type of capital is still considered very high risk.