what are things investor will see in your startup at the time of pitching?, what are things Investors will want you?..we can understand all things with the help this file.
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Startups Funding milestones
1. Startups funding milestones
-Pre-seed
Investorswill wantyoutohave a clearideaof whatyouwant to launchand the type of solutionthatyou
are bringingtowhatcouldbe a verybigmarketthat wouldultimatelydetermine the returnstheycan
generate.
At thisstage, itcouldbe justyouor perhapshave a few cofoundersthatare brainstormingwithyouhow
the future wouldlooklike.
Type of funders:accelerators,incubators,andcrowdfunding,andfriends&family
Fundingamount: Under $100K ona convertiblenote
-Seed
Withthe financingobtainedfromSeed,youare targetingtogeta MinimumViable Product(MVP) to
market.Investorswouldalsoexpectyoutobuild,atthisstage,the critical teamthat includesthe
absolute necessaryfolkstohelpyouexecuteonthe vision.
Most companiesare here at a pre-revenuestage andthe typical wayof financingisviaconvertible
notes,inorderto pushback the valuation.
Type of funders:angel investors,acceleratorsorincubators,crowdfunding,andfriends& family
Level of funding:under$2M via convertiblenotesandequityrounds.Valuationsvarybutnevergo
north of $4M.
2. -Series A
SeriesA financingroundshave changedsignificantlyoverthe years.Togive youan ideaVCfirmslike
SequoiaorAccel are nowinvesting$10Mand up forSeriesA rounds.For thisreason,itisa little bit
trickiertoaccomplishgettingto"fundabilitystatus"andmanystartupsendupdoinga bridge round
betweenSeedandSeriesA.
Duringthisstage,it isexpectedthatthe startupisshowingsome type of revenue growthmonthover
month.If thisis notthe case there has to be a critical metricthe businessismonitoringthatis
experiencingagoodamount of growth.
Type of funders:familyoffices,VCfirms,highnetworthindividuals,andequitycrowdfunding
Level of funding:between$5Mand$10M. If youhave a top tierVC itcouldbe $10M+. Valuationsrange
between$10Mto $20M pre-money.
-Series B
Most of the companieseitherfail togetto thislevel ordecide togrow on theirown.Note thatonce you
bringon a VC theywouldexpectthatyoudoat leasta 10X exitwhichwill provide thatkindof returns
for the level of expectationstheyhave fromtheirLPs(akainvestorsintheirfund).
SeriesBare usedto reallyscale uprevenues.Atthispointthe companyhasachievedbuildinga
repeatable andscalable businessmodelthathasa track recordand that isalsoexperiencingmomentum
and growthmonthovermonthfrom a revenue perspective.
Type of funders:VCfirmsand some familyoffices
Level of funding:over$15M at valuationsthatare around $50M pre-money.
3. -Series C
At the SeriesC level, there hasbeenareallygoodamountof growthexperiencedbythe company.At
thispointitis commonto see over100 employees aspart of the operation.Thistype of financingwillbe
usedtowardsan internationalexpansion.Giventhe demandof the productor service new revenue
potential opensuponnewmarketsthatrequiresanupfrontinvestmenttofuel the operation.
Type of funders:VCs,large institutional investors,andbanks
Level of funding:typically, youwouldsee amountsbeenraisedaround$30Mto $50M. Valuationsvary
but youwouldsee thematover$100M+. Rule of thumbis that youneverdilute yourselfbyover25%
perround of funding.
-Series D
At thispointyouare close toan IPO butneeda goodpush to kickthingsinthe highgear to lookgood
towardsan S-1 filing.Thisisthe formcompaniesfilewithcritical informationbefore goingpublic.
Type of funders:large institutional investorsandbanks
Level of funding:normallyyouwouldsee around$100M of capital beinginjectedintothe business.
Valuationsalsovarybuthere itis normal to start to see unicornstatus($1B+ pre-moneyvaluation).