Facilitating a startup with the required funds at every stage of business is quintessential. In the current scenario, most of the startups fail as they do not get access to capital and other key resources at the right time. Previously, we have already discussed how startup funding series works at various stages of business. Apart from knowing the various stages of startup funding, it is also important to know how startups benefit in terms of receiving financial aid, business model enhancement and further business goal setting and planning at each stage of funding.
In this blog, we will delve deep into how your startup could benefit from the three rounds of VC financing. The process of startup funding starts from pre-seed and seed rounds followed by a series of VC funding. The three stages of VC funding include series A, series B and series C funding. While series A and series B are meant for the growth stage of the business, series C aims are rapid upscaling at a successive stage. One of the main advantages of connecting with Coffeemug.ai is that the platform helps you connect virtually with investors, thus enabling high-growth entrepreneurs to effectively grow their business.
All the three stages of VC funding are important as it not only financially aids the startup owners but also pushes their limits to make their business competitive both indigenously and globally. In order to qualify for a particular round of VC funding, startups have to qualify in certain areas to prove that their business model has the capability to generate revenue. Let us figure out how startups benefit from Series A, B and C funding in detail.
What is Series A funding?
Startups valuing between $10 million to $30 million are eligible for the Series A funding round when they have developed a product, created a good user base and their business is revenue generating. Startups with a rewarding business strategy can raise around $15 million in this round, which will help them enter different markets and generate long term profits. Usually, venture capital firms are the main investors in this round of funding.
In the Series A funding stage, startups pester themselves to focus on sales figures of their product or service. Besides that, they realize the need to create new marketing and sales processes and tap into new areas for revenue generation to ensure rapid growth. At this stage, startups also take cognizance of their target audience. In a nutshell, Series A funding stage helps startup owners to develop products, focus on early-stage operations and do some initial branding and marketing.
What is Series B funding?
Startups valuing between $30 million to $60 million reach this stage once they have a revenue generating model in place and have proved their capability to achieve a larger scale. In the Series B funding, wherein, approximately $30 million can be raised, startups get prepared to meet various customer demands and operate in a highly competitive market.
In this round, the additional funding raised from VCs and late-stage VCs, startups can plan further to hire goal oriented professionals to head key roles like marketing, branding, operations, accounts, human resources. Besides that, the money raised can be used to foray into different market segments to add up to their customer base. At this stage, startups could also consider buying an early-stage startup that could provide them a competitive advantage.
What is Series C funding?
Startups valuing between $100 million to $120 million are eligible for the Series C round of funding. Series C funding startups are already on the growth path and are eyeing on new markets. Also, startups at this stage are well established with a strong user base and have recorded consistent revenues. An additional $50 million raised through investment banks, hedge funds, late-stage VCs and private equity firms helps startups to acquire new businesses that could add value to their business plans.
Series C funding is important for any startup because the substantial amount raised allows startup owners to venture into international markets. Investors are keen on investing in startups who have reached this stage of funding as they are sure of getting a return on their investment.
Funding rounds are quintessential, if startup owners want to make their business successful. They not only aid in terms of raising funds but also give direction about the best course of action and planning required at every stage of your business.
How CoffeeMug.ai can help you with the startup series funding?
If you are a startup owner and are looking for potential investors, CoffeeMug.ai can help you build the right network in your startup journey. The platform creates opportunities to help startups meet the prospective stakeholders of their business. CoffeeMug.ai connects you with key investors, prospective co-founders and industry experts who can help you shape up your startup. The curated network of the platform also ensures that you get access to the right set of people who could add value to your startup.
FAQs
Q. What is Series A funding India?
A. Series A financing is the next level of company investment after seed fundraising, and it often involves a large capital investment. Start-ups can only receive the funds after demonstrating that they have a solid company plan with great growth potential.
Q. Who Funds Series A?
A. Well-known venture capital (VC) and private equity (PE) firms, which manage multi-billion-dollar portfolios of various investments in start-up and early-stage companies, provide Series A funding.
Q. What stage is Series B funding?
A. One of the stages in a startup’s capital-raising process is series B funding, which is also known as series B funding or series B round. The series B round is the second round of venture capital funding and the third stage of startup funding.
Q. What happens after series C funding?
A. The original business founders give up more of the company with each funding round, diminishing their own position and authority. The original owners possess a lesser piece of a large company after Series C fundraising, but their shares have ideally gained in value significantly as ground-floor investors.
