Types of Funding

 

Any new business or start-up company needs finance to not only start but also to grow. A regular inflow of capital is very important for a company to do well. This is a very well calculated and strategic decision. To attract the right kind of investors and the right amount of money, the potential investors have to be vetted carefully and the goals clearly defined. There are different kinds of funding at different stages of a company. The founders of the company should understand the process before they start to try these out.

  1. Pre-seed funding: this is the earliest stage of funding and it comes so early in the process that it is sometimes not even considered a round of funding. Most commonly it is the founders themselves who raise the capital for this round. This round can also include friends, family, and, investors who would like a share of equity in exchange for funds. Bitcoin Code is a good example of this kind of funding.
  2. Seed funding: this is the first official funding stage. This is the seed which will help you grow the business. Seed funding will help to grow the business and eventually grow into a tree. It helps the company to finance its first steps. It is used to employ a founding team. Most common types of investors participating in this round are called angel investors. Sometimes the founders don’t go beyond this round and don’t need any more finance.
  3. Series A: once a business is on its feet and going steady then starts the next round of funding. If a company wants to grow and optimize its business offerings then they will go for this round of funding. It is important to have a sound business plan that will work long term. To utilize the funds correctly to scale up it is important to have the right strategy. The investors are looking for both great ideas and good strategy.
  4. Series B: this is all about taking the business to the next level. The investors help the companies get there by expanding market reach. By reaching this round the companies have already proven that they are prepared for success on a larger scale. With this round of funding, a company will strengthen its sale, advertising, tech support teams, and other talent acquisition. Bitcoin Code started small but became successful over a period of time.
  5. Series C: this round of funding happens only after the business is already a success. This round helps the company in coming out with new products or expand into newer markets or even to acquire other companies. This round is focused on scaling the company and making it bigger.