Me and my friend was working on a B2C product now that we got some small seed funding what should we invest it upon ? Should we go for hiring more interns to speed up the development or should we spend the entire revenue on advertisement?

Revenue ? Have you started earning revenue already. Or you are meaning the fund you got as the revenue ? Dont burn the funds on advertisement. Get a version of the product out (beta or early access). Get few real customers to use it. Use the fund judiciously to acquire customers. In other words, use the funds to complete the product and for sales efforts. (Sales spending is different from advertisement spending)

A basic framework to think might be where do you see maximum impact in the short-term- Will you get more users rapidly by advertisement or by adding additional features to the product? One way to answer this question might be to  benchmark user base penetration (# users/potential) and user satisfaction levels with similar products in market.