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"THE RAISE MAZE" - Funding A StartUp

Anybody who has been involved in starting a company or running a company knows that the need for cash is never far away. From a fledging idea to a start up with revenue and scalability raising funds is often at both the front and back of the founders mind at some stage during the working week.


In so far as investment rounds go there are loosely 7 stages:


Pre seed

Seed

Series A

Series B

Series C

IPO (Initial Public Offering)

Structured Finance


Or Crowd funding at any stage.


The first 6 are either based on the investor receiving immediate equity or future equity known as a SAFE round (simple agreement for future equity). Or they can be a convertible loan note (CLN) arrangement which is a short term debt note that the investor can convert to shares at a later date.


Structured finance comes into play when the company is established and their cash needs are some what complex. They are a huge number of variations here but also many choices available in the open market place.


For most the first 5 are of more relevance and below I set out simple explanations of where a company might be at varying stages



Pre-Seed Funding


The earliest stage of funding a new company comes so early in the process that it is not generally included among the rounds of funding at all. Known as "pre-seed" funding, this stage typically refers to the period in which a company's founders are first getting their operations off the ground. The most common "pre-seed" funders are the founders themselves, as well as close friends, supporters and family. It's is likely that investors at this stage are not making an investment in exchange for equity in the company.


Seed Funding


Seed funding is the first official equity funding stage. It typically represents the first official money that a business venture or enterprise raises. Some companies never extend beyond seed funding into Series A rounds or beyond.It helps a company to finance its first steps, including things like market research and product development. With seed funding, a company has assistance in determining what its final products will be and who its target demographic is. Seed funding is also used to employ a founding team to complete these tasks.How much is generated from seed funding can vary widely typically from £10,000 to maybe as much as £2 million.


Series A Funding


Once a business has developed a track record ie an established user base and consistent revenue figures, that company may opt for series A funding in order to further optimise its user base and product offerings. Opportunities may be taken to scale the product across different markets. Typically, Series A rounds raise approximately between £2 million to £15 million, although in the high tech industry has raised the bar a bit pushing the average series A funding in 2020 to £12 million with some very large series A funding going to potential Unicorns


Series B Funding

Series B rounds are all about taking businesses to the next level, past the development stage. Investors help startups get there by expanding market reach. Companies that have gone through seed and Series A funding rounds have already developed substantial user bases and have proven to investors that they are prepared for success on a larger scale. Series B funding is used to grow the company so that it can meet these levels of demand.


Series C Funding


Businesses that make it to Series C funding sessions are already quite successful. These companies look for additional funding in order to help them develop new products, expand into new markets, or even to acquire other companies. In Series C rounds, investors inject capital into the meat of successful businesses, in an effort to receive more than double that amount back. Series C funding is focused on scaling the company, growing as quickly and as successfully as possible.


IPO (Initial Public Offering)


An IPO refers to the process of offering shares of a private Companyto the public in a new share issue. An IPO allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes a share premium for current private investors. Meanwhile, it also allows public investors to participate in the offering.


Crowd Funding


Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, with the potential to increase entrepreneurship by expanding the pool of investors beyond the traditional circle of owners, relatives, and venture capitalists.


Talk to the Vintage Team if you need assistance

Vintage Entrepreneur are connected to a very active Investor community including Angels Vc’s Family offices and Fund groups. The platform is Worldwide and includes investors from the growing Asian market. We have as a special partner one of India’s largest banks with whom we and act as a conduit for them to seek investment opportunities. We also have structured finance deals available for companies seeking funding on a non equity basis. This being more appropriate for established entities.We charge a very low fixed fee to platform a pitch set up an online live presentation to over 100 investors and directly Introduce our members or clients to Investors Interested in their industry space.


For those of you still at the idea stage of a digital product talk to us we may have an ideal solution for you.



Contact us at: vintage-entrepreneur@yandex.com or set up a video meeting here: https://calendly.com/vintage-entrepreneur/30min



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