2. Stages of a start up
1.Pre-Seed Stage
2.Seed Stage
3.Early Stage
4.Growth Stage
5.Expansion phase
6.Exit phase
3. Pre-Seed stage
As an entrepreneur, you should also question yourself with the
following:
• Is my solution a real answer to the problem being solved?
• Can my solution affect other pain points in the industry by
aggravating them and/or reducing the acceptance of the target
market?
• Is my solution similar to an already existing one?
4. Seed Stage
• This phase seeks the first materializations of a startup. This can
be done through developing prototypes, which are small
experiments carried out to validate the initial idea on which a
startup is based.
• Its objective is the validation of the initial value hypothesis. An
early-stage prototype of a development does not need to be
functional, nor a viable product.
• Validation of an idea is the process by which evidence is
gathered, through experimentation, to make quick, informed,
and risk-free decisions.
5. Early Stage
• The early stage indicates the beginning of a phase in which the
idea is left to evolve until it becomes a product or service in the
market. It´s now the time to launch a test. It will not be the final
version; it will now be tested to see it´s a Minimum Viable
Product (MVP).
• Typically, at this stage startups already have a team,
independently of the size, if they cover the required areas and
run the initial tasks. Now is the moment to have a business
model defined, even if it’s not complete.
• At this stage, in addition to the funding agencies seen in the
previous phase, gain more value Venture Capitals and
accelerators, which are entities that beyond supporting
emerging ideas, also help new business models test their
solutions and access customers.
6. Growth Stage
• Strong market demand is met if a startup’s product or service
reaches this stage. This means that there will be upward figures
in terms of new customers, recurring customers, and billing.
Profitability here is paramount. This is when the team starts to
grow, and recruitment begins.
• This phase has the highest failure rate. It does not mean that
the product or service stays fixed, since you will probably have
to adjust it to approach a new sector of your target audience,
meet new demands, or occupy new spaces that weren’t
planned.
7. Expansion Stage
• Faced with a more widespread definition of the term startup,
a scaleup demonstrates a proven business model that allows it
to consider more ambitious goals, for example,
internationalization, expansion to other sectors or hiring new
professionals.
• In this phase, companies that have already advanced in the
execution of their business model move forward, consolidating
their growth in both revenue and employees.
8. Exit Phase
• This phase is not mandatory and does not always take part
among startups. There are business models whose goal is to
become a high value and long-term company.
• This output can occur in many ways, although three common
options stand out: sale of the founders’ shares to another
company, acquisition by another company or an Initial Public
Offering (IPO), which means their entry into sale.
10. Pre-Seed Funding
• Is your idea viable?
• Has your idea been done before?
• How costly is your venture?
• What kind of business model will you use?
• How will you get started?
11. Seed Funding
• Product launch
• Product marketing
• New employees
• Market research on product-market-fit
12. Series A Funding
• Optimizing your business
• Offsetting financial losses or shortfalls
• Further developing your product or service
• Creating a scalable blueprint for growth
13. Series B Funding
Startups in this stage have dedicated user bases and steady
streams of revenue. At this point, you've proven you can scale
your idea. Investors can now help you:
• Employ advanced market reach activities
• Increase market share
• Form operational teams such as business development and
marketing
14. Series C Funding
Series C funding is for a company well on its growth path and
often interested in expanding globally. It may be easier to find
investors at this stage, as they trust the startup to succeed. Funds
at this phase are used to do the following:
• Build new products
• Reach new markets
• Acquire underperforming startups in the same industry
15. Series D Funding
• There are usually two reasons a startup goes past the Series C
funding round. They are:
• New opportunities: A potentially lucrative opportunity appears
that requires the company to act before the Initial Public
Offering (IPO).
• Subpar performance: The startup misses the goals set during
the Series C round of funding. It then raises more funds in the
Series D round to address the issues.
16. Mezzanine Funding & Bridge Loans
• A mezzanine loan blends debt and equity for lenders, while
bridge loans are short-term financing.
• They close the financial gap between this phase and the IPO.
• The funds might be used to buyout the management at another
company or acquire a competitor.
• Loans typically last six to 12 months and are paid back with
proceeds from the IPO.
17. IPO
• An IPO is the pinnacle of startup success. It occurs when shares
of the company are offered up for public purchase for the first
time.
• The IPO is used to generate funds for further growth or allowing
the startup owners to cash out their remaining shares for
personal income.
