The document discusses various stages of funding rounds for startups, including friends and family rounds with little investment; angel investments to test sales potential; seed rounds under $2 million with minimal financial reporting; Series A rounds over $5 million where founders pitch to VCs and financials are expected; Series B+ where accounting moves in-house and GAAP reporting is required; and debt financing from banks with high interest rates.

1. REPORTING REQUIREMENT REPORTING REQUIREMENT REPORTING REQUIREMENT
The reporting requirements for Series A
are strict. Investors expect to see GAAP-based
financials at their board meetings.
S E R I E S A
Like a Series A, but bigger. Larger, more
established funding institutions normally
jump into the game.
This is when companies move their accounting
functions in-house. There is almost always
a strict GAAP reporting requirement.
S E R I E S B +
Financial institutions always require
GAAP financials as a means of managing risk.
VENTURE DEBT/DEBT FINANCING
A B
Series A rounds normally include a mix of
old and new investors. They are generally
over $5M in size, and at this point, most
startup founders hit the fundraising trail
by pitching to all of the luminary venture
capitalists in their industry.
Some startups will open a line of credit
at a bank or credit union to access large
amounts of capital without giving up
a stake in the business to a financier.
The trade off for venture debt?
High interest rates (around 3%).
F R I E N D S & F A M I LY R O U N D
THE STARTUP
FOUNDER’S
GUIDE TO
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Series A rounds normally include a mix of
old and new investors. They are generally
over $5M in size, and at this point, most
startup founders hit the fundraising trail
F R I E N D S & F A M I LY R O U N D
S T A R T U P F O U N D E R ’ S
THE
ROADMAP
FUNDING
ROUNDS
FUNDING
ROUNDS
TO
If you haven't pursued
equity financing, it can
be hard to know what
to expect. What are the
differences between
each round? What
does each one entail?
This timeline showcases
7 types of funding
rounds and the financial
expectations associated
with each one.
Just as it sounds, the friends and
family round is when you reach out
to your personal network for smaller
investments in your company,
generally under $500,000.
Once you’ve proven sales potential and
understand your market, it’s time to look
for equity capital. Because businesses are
usually still premature at this round,
angel investors invest in many early
stage companies simultaneously. If a
company does well, they can reinvest
in a future round.
A N G E L I N V E S T M E N T
A seed round is the first big round of
funding a startup seeks from outside
investors. Seed rounds, depending on
the type of company, are generally under
$2M. Investors in a seed round want their
portfolio companies to grow as quickly as
possible and spend investor money only
on the absolute necessities.
Aside from tax-compliance, no hard
and fast financial reporting requirements.
S E E D R O U N D
A series seed is a “bridge” round of
financing larger than an average seed
round but not quite on par with a
“Series A”.
Financial requirements are
the same as a seed round.
S E R I E S S E E D R O U N D
FUNDRAISINGFUNDRAISINGFUNDRAISINGFUNDRAISINGFUNDRAISINGFUNDRAISING
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Little, if any financial reporting requirements
but requires a solid business model.
No financial reporting requirements.
REPORTING REQUIREMENT REPORTING REQUIREMENT REPORTING REQUIREMENT REPORTING REQUIREMENT