Question

Identify funding requests. Identify and explain the funds needed for the micro-seed and seed stages of business.

Answer 1

Funding required for various seed stages of a business:

Accprding to a Bank Survey highlights, more than 60% of startups require external funds to get going with their operations. The stages of seed funding are as follows:

1. Pre Seed funding: also knows as bootstrapping , where a business uses its own resources at disposal to set the business rolling. Funds are needed in this stage for market testing, further research on the idea, developing marketing and sales plan for the product launch. Investors include startup owners, friends and family.

2. Seed Funding: Next stage encompassing product launch, recruiting, building traction till revenue starts coming in. Investors include angel investors, friends and family, crowdfunding etc.

3. Series A funding: first round of venture capital financing, stage where the key team is at place, working business model, further development of product. Investors: accelerators, super angel investors, venture capitalists.

4. Series B funding: stage of scaling up, increase market share. Investors include venture capitalists, late stage VCs

5. Series C and beyond: stage of expansion, increase market share and putting the company on IPO track. Investors include: late stage VCs, private equity firms, Banks, Hedge Funds etc.