Question

identify the 5 stages in venture capital financing and describe to the understanding of a layman any three of the 5 stages.

Answer 1

The five stages of a venture capital funding are:

1. Seed funding

2. Startup Capital

3. Early Stage capital

4. Expansion stage capital

5. Pre-public stage capital

Seed Funding: This is the funding that goes into the research and development of the product. The startup leaders will create the first version of the product using this funding and try to convince the investors for next round of funding to start the company.

3. Startup Capital: This stage of the funding is when the company has a product and now they want to promote it through marketing activities. They want to add more team members and improve the product to make ready for a launch in the market.

4. Early Stage Capital: This stage also involves the marketing and product development activities but the scale will be larger. The company will try to generate revenue out of it and keep working on the product development. This funding will be within the first years of the company and it aims at making the product commercially available.