Stages of Venture Capital Funding

Stages of Venture Capital Funding

Venture capital firms invest in promising startup companies in every conceivable industry. Venture capital could become a key player in funding your startup. But what exactly does “seed round” or “A Round” funding mean?

Often, an entrepreneur relies on personal savings and the charity of friends and family to set up and start running his or her business. However, if this funding is not enough, he or she will have to turn to other sources. Seed capital, Series A, Series B and Series C all refer to stages of startup funding. In each stage, the startup exchanges a part of its business—equity—for cash that it uses to grow and expand.

When a startup raises seed capital, it raises money to conduct market research, develop its product and launch it on the market. Angel investors and certain venture capital firms are the primary investors in this stage.

After a seed round, the startup may continue to a Series A round of funding, expanding the reach of its product. Series B rounds take the business a step further, developing its resources and introducing its product to wider markets. Series C rounds enhance the performance of already successful businesses. In each successive round of funding, both the business and amount of capital injected grow in size.

Funding rounds can continue indefinitely from Series D to Z, with incrementally larger amounts of funding being invested in the business as it matures. Ideally, these funding rounds will ultimately carry a business to a flotation or acquisition, allowing the entrepreneur to reap the benefits of his or her effort.

Are Investors needed in your startup? Looking for the venture capital firm that matches your needs? Try using Investeur’s Startup Buddy app. The Investeur team knows how to get funding for startups. We will help match you to the right venture capital firm to get you the capital your startup needs.