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The ABC of Funding – a rough guide

Seed funding – the early development stage may include market research, prototyping, testing and proof of concept.  It may be self-funded or via family, friends, crowd funding and even angel investors.

Series A – by this stage the company should have customers, reviews, some traction and should be fine-tuning its business model and distribution channels ready to go to the next level.  Investors may be equity crowd funders and/or venture capitalists.

Series B – this facilitates expansion to increase market size, customers and consider acquisitions and mergers.  Late stage venture capitalists are usually involved.  This is the stage where founders typically bring in other expertise and expand the team.

Series C – at this point the company is doing well and looking for international markets and/or to develop new products and services.  They may also be looking to increase their valuation before going to an Inititial Public Offering (IPO) or an acquisition. Investors at this stage may be private equity companies, hedge funds and investment bankers.

Series D & E – not many companies make it to D and E but if they do so it may be because the company hasn’t reached its expectations and may need more time, or it may want to delay going public. The “down round” is when a company raises money at a lower valuation than they raised in their previous round.

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