Whether your startup is in the planning stages or you are already up and running, you need startup funding to grow. Investors are the biggest source of startup capital, providing money in exchange for a piece of your business. Founders must weigh the pros and cons of pursuing this type of funding before making a decision. Investor funds can drive growth and open doors, but they also come with a lot of added responsibility and pressure to scale quickly. In contrast, self-funding can let you keep full control of your company and avoid giving up equity.
Pre-seed Funding
Early-stage startups may seek seed investment from family and friends, angel investors or incubator programs like Y Combinator. These investments often involve minimal legal agreements and a low percentage of ownership. Investors in these types of deals typically bring valuable expertise and connections that can help your business thrive.
Series A Funding
Once your startup has a proven track record of success, it can attract more substantial investment from venture capital firms and private equity firms in its Series A round. During this phase, your company can be valued at up to $100 million or more.
Series C Funding
Startups that are doing well in their current market can raise more money to expand into new markets or develop additional products. This final stage of funding is usually led by a private equity firm or a large corporate investor.