There are 5 stages of venture capital financing: 1. Pre-seed capital provides initial funding to launch a business before a product is released. 2. Startup capital funds a working prototype and initial consumer testing. 3. Early stage or second stage capital funds manufacturing, production, sales, and marketing as a product is promoted and may begin to turn a profit. 4. Expansion stage or third stage capital provides additional funding for growth. 5. Later stage or mezzanine/bridge funding occurs just before an IPO or acquisition.

1. FINANCIAL MANAGEMENT
Long-term Financing Decision
Module - 03
Presented By:
Chethan H S
Akash V
Brundashree
Bharath
Anjaneya

2. STAGES OF VENTURE CAPITAL
There are 5 stages of venture capital
1. Pre-seed capital
2. Start-up capital
3. Early stage ( Second stage capital )
4. Expansion stage ( Third Stage Capital )
5. Later stage – Mezzanine/ Bridge

3. 1.PRE-SEED CAPITAL
• The first stage of venture capital is commonly referred to as pre-seed
capital
• It provides the initial funding necessary to launch a business and get it
off the ground.
• It’s possible that at this stage a startup’s leaders have yet to release a
product to the public

4. 02. STARTUP CAPITAL
• After the pre-seed stage, startup companies receive funding
from venture capitalists in what is known as the “startup
capital” stage.
• Most businesses will have a working prototype of their
product ready for consumers to try.

5. 03.EARLY STAGE (SECOND STAGE
CAPITAL)
• This stage usually occurs after the pre-seed and startup
stages. This is because money from this stage is commonly
used for manufacturing, production facilities, sales, and
increased marketing.
• The sum of money invested here may be pretty worthwhile
than in previous stages. As the firm continues to promote its
goods and marketing, it may soon begin to turn a profit.

6. TYPES OF VENTURE CAPITAL
1. SHARES IN EQUITY
• Equity share normally know as ordinary share is a part Of ownership were
each member is a fractional owner and insist the maximum
entrepreneurial liability to a trading concern
• Features of equity share
• 1. Equity share capital remain with the company. It is given back only when the company is
close.
• 2. Equity shareholder possess voting rights and select the comp a nys management.
• 3 There is no fixed rate of dividend on equity capital.
• Types of equity shares
• 1. Authorised share capital
• 2. Issued share capital
• 3. Subscribed share capital
• 4 . Right share
• 5. Bonus share

7. CONDITIONAL LOAN
• There is no fixed rate of interest attached to these loans.
• There is no prrdetermined schedule for payment.
• Common in indian venture capital industry
• A royalty amount which ranges from 2% to 15 % of the sales turnover is
payable to the VCF for the purpose oo repayment.
• These loan bear no interest rate.

8. PARTICIPATING IN DEBENTURES
• Meaning:- participating debenture means investing in a type of debt
security issued by a company or government.
• Interest payment :- debenture provide regular interest payment investors
• Types of debenture:- different type include convertible debentures ( can
be converted into equity shares)( non converted debentures cannot be
converted)
• Risk and returns :- debenture offer fixed return making them relatively
Safer comfort to equity investment.
• Credit ratings:- check be issuers credit rating from agency like moodys
or s and p to assess the risk of difficult.

9. Thank You