Money Global

5 Stages of Startup Funding

5 Stages of Startup Funding
Image Courtesy: Pexels

Do you run a new business? Then you will understand that regardless of what stage of startup funding you are in, you require cash to keep the lights on, the staff content, and the momentum going. 

You must therefore fully grasp each stage of funding. If you don’t, you might not attract new investors and end up losing the ones you already have. Discover the five phases of startup funding now! 

Seed Capital

Your initial investment is essentially one of the earliest sources of capital. You must rely mostly on personal savings, credit cards, crowdsourcing, friends, and family to obtain your starting funds. 

Make sure you fulfill your commitments and specify the concrete deliverables, regardless of where you obtain the startup cash. Now, if you were wise and purchased cryptocurrency, you can also utilize that to fund your firm. 

Angel Investor Funding

Angel investors are required, and they require a compelling, profitable proposition. Angel investors are individuals with a net worth of at least $1 million. When you become aware that you need additional financing to increase your teams, marketing, advertising, and similar endeavors, the second round of funding begins. 

Since the amount of money that can be raised at this point is more than seed funding, keep in mind that investors will be looking for enticing returns. 

Venture Capital

In this investment procedure, venture capital is introduced in the third step. Here, money is required for increasing the marketing budget, identifying new company opportunities, and making investments in client budgets. 

Venture capital firms frequently assist new businesses. You can win them over if you can make a convincing and profitable case. 

Bridge Loans

By the time you get to the fourth stage of startup funding, you will have made enough progress. Even if your startup is not successful at this point, revenue must be pouring in. Therefore, you must have a commercial product. 

Simply enter new markets or get ready for an IPO with the money you receive from bridge loans. You might also buy bitcoin to increase your resources. 

Initial Public Offering

The next level is automatically an IPO if you have successfully raised money through all four rounds, although this is not the final goal. The investors who are exchanging money for equity will have room to recover and make more money.  In the absence of equivalent support, your assets are always a safe bet.