Venture capital and other funding options for businesses are discussed. Seed funding of $100k-$500k is typically sought to build the basic company and is less commonly provided by venture capitalists (VCs). Only 15-25% of VC firms invest at the seed stage. Early stage funding where VCs are more likely to invest is for companies ready to trade but needing funds for salaries. Later stage or expansion funding is for growing companies seeking to expand. The document provides an overview of different funding stages and sources including friends/family, angels, debt financing, and venture capital.

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Venture Capital – and Other Funding Options For Your Business
When is the right time to consider VC or Private Equity for your enterprise? Initially every entrepreneur
needstofirst see if they have exhausted all otheroptions first. Typically,acompany would be lowonequity
whenconsideringprivate investors. There are however multiple sources of equity capital, including,Friends
& Family, BusinessAngels, VC, Corporate/strategicinvestors, Private EquitycompaniesorThe Entrepreneur’s
own capital.
Forthose seekingcapitalof $500k+lookforVC. Forsmallerinvestments, entrepreneurs shouldseekaBusiness
Angel or Debt Capital. An understanding of the different types of funding stages is therefore useful so see
below.
Pre-seed funding is funding that is needed prior to physically construct the enterprise. Usually this
funding goes to putting together a good business plan that can impress potential investors.
Seed funding is funding that is required to start building the company. It is possible that some
companies could if appropriate skip this funding phase, but seed capital is usually the capital that is
required to get the basics for a start-up. Usually at seed stage, a company is not yet ready to open for
business, andthisfundingisusually usedtorentoffice space, real estate, equipmentneeded toproduce
the company’s product or service
Seedfundingislesscommonly investedbyVC’sandisnotnecessarilyalarge amountof funding. Seed funding
can range from $100k-$500k. Rarely does it exceed $1m. Seed capital can also be raised from a business
angel,friendsandfamily orthe entrepreneur’s ownfunds. Only15% to25% of VCfirmsinvestinseedfunding.
Early stage funding is usually where VC is sought. A company is usually ready to trade but requires
additional capital for salaries.
Later stage fundingisalsoknown asexpansion/growthstagefundingisforcompanieswhoare doingwell
and are seeking to expand.
There are numerous ways that entrepreneurs raise seed capital to get started. These conventional ways
include raisingdebtcapital fromabusiness lender, merchantbankorangel investorwhoare willingtoinvest
seed capital into the business. Other more ingenious entrepreneurs raise seed capital through raising debt
capital, sweat equity and funding from friends and family. VC isusually raisedwithearly stage funding, i.e.
as above, series A orseriesBfunding. Inmostcases, VCfirmswillnotinvestlessthan $1millioninacompany.