As a startup grows, there are always more costs that pop up here and there. A business’s seed round funding only lasts so long. If a founder is experiencing continued growth and success, they have the opportunity to receive additional funding in the form of subsequent series. Incubators, accelerators, angel investors, and venture capitalists are just a few examples of sources for these series. Let’s learn more about each of the series stages.
Series A is the first funding stage available after the seed stage. This stage is typically open to founders with businesses that have developed a track record based on key performance indicators. These KPIs may differ from startup to startup; user base numbers and consistent revenue numbers are instances that show your startup is more established and serious.
In this stage, investors are looking for founders with strong strategies to keep growing and making more money with their intriguing product. In order to impress, it’s important to have a business plan outlining how you’re going to make long-term profit.
The series B stage is commonly where a startup moves past the development stage. The previous stages have proven that the venture is well-established, prepared for continued success, and has a developed user base. Series B funding comes in to help startups respond to increased demands brought on by the growing user base.
Bulking up your business is what the series B stage is all about. The funding from this stage is often used for increased spending on areas like marketing, business development, talent acquisition, tech, and support.
Businesses seeking series C funding have proven themselves and become very successful. This round of funding is sought after to further build their dominance and expand on their success. It’s main goal is to scale the business as quickly and successfully as possible.
You may see series C funding used to develop new products and increase reach into new markets with different customers. Acquiring other companies is also a way some startups choose to use series C funding, further strengthening their success.