Series A, B, C, D Funding

The very first investment round is called the seed funding. This round helps the company begin its operations and get off the ground. For the company to grow, it would need more investment, even if the company has begun to earn profits. After the seed round, the next rounds of investment are the Series A, B, C, D. There can be more Series funding as needed, or until the company goes public.

Series A & B

Once a business has started and has begun to operate, the next step is for the company to grow. And in this case, the company would need investment, in the form of a Series A funding. A company opts for this financing round to grow its user base and product offerings. This round normally helps the company raise $2 million to about $17 million, coming from VC (venture capitalists)

The next funding round is called Series B, where B means “build.” When a company has a good base, and the company is operating robustly, it is time to open branches or export its products. To be able to move on a larger scale, you would need talent and money. That is where a company usually opts for the Series B funding round. The estimated capital raised is usually similar to Series A round, with funds coming from VC firms.

Series C & so on

Companies that reach Series C funding rounds are usually highly successful. They need the Series C funding mostly to develop new products or to acquire a new company. In short, when the company wants to further expand its product or services, they undertake the Series C round.

After the Series C round, many companies end their decisions for external equity funding. Nonetheless, a few highly successful companies also enter the Series D and Series E funding rounds. The reasons can be anything from expanding, making the company strong before going public, or for merging with another company. In short, these rounds are for companies with high value and growth.

Example

Tom registered his dream idea as a business. But as he did not have a lot of money for the company, he asked his family to help out. After that, his company began to move smoothly. But after some time, as the company was not earning a lot of profits and he began to get huge orders, it was time to get another funding, the Series A funding round. Tom got the funding and the company began to expand.

After three years, Tom wanted to go national with his idea. For this he needed more funding. Again, he looked for an investor for the Series B funding round. With this additional funding, Tom could grow his product base, and really start to take off. After expanding his company, he eventually decided to have a Series D round after which the company went public.

So, in short, when you hear about the terms Series A, B,C,D funding, just remember these rounds are for funding from outside investors to expand the company.

If you still want to know more about the investment series A, B, C, D, Eqvista can help you. Eqvista also offers a cap table application that can help you keep track of all the shares in your company. Check out the application & contact us today!