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Sep 11

The stages of funding your start-up

In this blog I’m simply illustrating the basic stages of funding a project, where the funds come from and when. Funds come in stages known as series and rounds. The funds are also referred to as internal or external. Internal refers to your initial and subsequent investments, and monies from friends, families and fanatics. External monies are monies from angels, VCs, banks, etc.

Seed / Friends and Family Round – Entrepreneur invests own money and monies from friends, family members and fanatics to get ball rolling. Grants and philanthropic donors / investors are also an option (say $10k to $100k) (see JMPstart Ventures)

Series A – Version 1 of product, secured bank / SBA loan, angel and early stage venture capitalist (say $50k to $1mm, yr 1 to yr 2)

Series B – Version 2.x plus of product, expanding product line or had to pivot, VC funding, strategic partners, various rounds ($1mm plus, yr 2 to yr 4)

Series C – Venture capitalist, strategic partners, company is mature, multiple products, significant growth strategies ($50mm to you name the figure) Note: Some things are excluded from above, such as incubators, which will be addressed in future blogs.

 

"This article may not be reproduced in whole or part without including the name of the author (James Naylor) and an acknowledgement of the fact the article was originally published in Shoestring Advice for Technology Startups (http://www.KENOVATech.com/blog). Any other use of this material is unauthorized and is a violation of law."

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