While the company may not yet be profitable, the outlook is promising. At this point, startup companies should be generating revenue and demonstrating robust growth. Series D, series E and series F rounds are late-stage VC funding. The funding amounts are greater than the seed round, as startup founders are ramping up their businesses. Typically designated as series A, series B and series C rounds, early stage capital helps startups get through their first stage of growth. This is the first round of VC funding, in which venture capitalists offer a small amount of capital to help a new company develop its business plan and create a minimum viable product (MVP). Some venture capital funds specialize in particular stages, while others may consider investing at any time. Stages of Venture Capital InvestingĪs portfolio companies grow and evolve, they pass through different stages in the VC process. Often, capital is provided in multiple rounds and the VC firm will take an active role in helping run the portfolio company. If the due diligence process is successful and the growth outlook for the business is promising, the VC firm will offer capital in exchange for an equity stake. Extensive due diligence is vital to making good investment decisions. Regardless of how far along the business is, a VC firm also takes a deep look at the principals-everything from their education and professional experience to relevant personal details. If the VC firm considers the business plan to be promising, it will conduct due diligence, which entails a deep dive into the business model, product, management, operating history and other areas pertinent to assessing the quality of the business and idea.
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