Series A, B and C funding

Series A, B and C funding

Subject: Economy

Context: Agnishwar Jayaprakash, founder and CEO of Garuda Aerospace, was in for a very pleasant surprise on Tuesday morning when he realised that Elon Musk had liked his tweet on Garuda’s new Surya drone that could potentially clean solar panels at Singapore’s new floating solar farms

Concept:

The large majority of successful startups have engaged in many efforts to raise capital through rounds of external funding. These funding rounds provide outside investors the opportunity to invest cash in a growing company in exchange for equity, or partial ownership of that company.

Series A, B and C funding rounds are merely stepping stones in the process of turning an ingenious idea into a revolutionary global company, ripe for an IPO.

Series A Funding

• Once a business has developed a track record (an established user base, consistent revenue figures, or some other key performance indicator), that company may opt for Series A funding in order to further optimize its user base and product offerings.
• In this round, it’s important to have a plan for developing a business model that will generate long-term profit.
• Series A rounds raise approximately $2 million to $15 million
• Investors are looking for companies with great ideas as well as a strong strategy for turning that idea into a successful, money-making business. The investors involved in the Series A round come from more traditional venture capital firms.
• It’s also common for investors to take part in a somewhat more political process. It’s common for a few venture capital firms to lead the pack. In fact, a single investor may serve as an “anchor.” Once a company has secured a first investor, it may find that it’s easier to attract additional investors as well.
• Angel investors also invest at this stage, but they tend to have much less influence in this funding round than they did in the seed funding stage.

Series B Funding

• Series B rounds are all about taking businesses to the next level, past the development stage.
• Investors help start-ups get there by expanding market reach. Companies that have gone through seed and Series A funding rounds have already developed substantial user bases and have proven to investors that they are prepared for success on a larger scale.
• It is used in bulking up on business development, sales, advertising, tech, support, and employees costs a firm a few pennies.
• The average estimated capital raised in a Series B round is $33 million
• Series B appears similar to Series A in terms of the processes and key players.
• The difference with Series B is the addition of a new wave of other venture capital firms that specialize in later-stage investing.

Series C Funding

• Businesses that make it to Series C funding sessions are already quite successful.
• These companies look for additional funding in order to help them develop new products, expand into new markets, or even to acquire other companies.
• In Series C rounds, investors inject capital into the meat of successful businesses, in an effort to receive more than double that amount back. Series C funding is focused on scaling the company, growing as quickly and as successfully as possible.
• Series C funding could be used to buy another company.
• In Series C, groups such as hedge funds, investment banks, private equity firms, and large secondary market groups accompany the type of investors mentioned above.
• Companies that do continue with Series D funding tend to either do so because they are in search of a final push before an IPO or, alternatively, because they have not yet been able to achieve the goals they set out to accomplish during Series C funding.