We explored seed funding and the various levels of seed funding in the earlier article. The next following rounds are called as series funding and are divided into Series A, B and C respectively after a startup completes a seed funding round.
There is typically a cycle for these series funds and Series A is the first of the three funding rounds. Many start-ups often spend years looking for Series A funding, while some other start-ups quickly get there at an early stage. Funding for the series is a move for a start-up to either become a Unicorn or to request an initial public offering (IPO).
Series funding :
The Series A, B and C funding rounds often see investors putting their money into a start-up in return for equity, as is the case for seed funding. A startup’s success directly corresponds to the amount of returns that an investor receives.
Series A funding:
The startup may opt for a Series A round of funding once a startup gains a proven customer base and consistent revenue. Series A funding helps to improve the customer base as well as to take opportunities to scale the product into various markets. A start-up typically plans a long-term business plan after securing support from Series A. The budget range for Series A is between $2 million and $15 million. Investors look for a brilliant idea and strategy to take a great idea and make it a company.
Series B funding:
Funding rounds for Series B are mostly for companies developing and bringing their company to the next level. Large user bases have already been developed by Seed and Series A funding, and have demonstrated to investors that they are prepared on a larger scale for success. Funding from Series B is generally used to scale a startup to meet the rising levels of demand. Support for Series B is between $30 million and $60 million, with an average of $33 million in funding.
Series C funding:
By the time start-ups hit the financing round of Series C, they are typically very good. For start-ups, the concept behind the Series C funding round is to raise money to create new products and grow into new markets or maybe even acquire other companies. Normally, during the Series C round of funding, investors expect a good return on their investment. Companies who are competing for Series C funding typically want to go for an IPO or expand on a global scale.