Road To Entrepreneurship -Funding for STARTUP

Road To Entrepreneurship -Funding for STARTUP

Funding rounds provide outside investors with the opportunity to invest cash in a growing company in exchange for equity, or partial ownership of that company. if the company grows and earns a profit, the investor will be rewarded commensurate with the investment made. Before any round of funding begins, analysts undertake a valuation of the company in question. Valuations are derived from many different factors, including management, proven track record, market size, and risk. 

Startups first engage in what is known as "seed" funding or angel investor funding. Next, these funding rounds can be followed by Series A, B, and C funding rounds.

Some basic terms:

Equity: Equity essentially means ownership. Equity represents one's percentage of ownership interest in a given company. For startup investors, this means the percentage of the company's shares that a startup is willing to sell to investors for a specific amount of money. 

Lean Startup: The lean startup methodology calls for entrepreneurs to start their business ventures by searching for a business model and then testing their ideas. Feedback from potential customers is then used to adjust their ideas as they move forward. Instead of business plans, lean startups use a business model based on hypotheses that are tested rapidly. Data does not need to be completed before proceeding; it just needs to be sufficient. When customers do not react as desired, the startup quickly adjusts to limit its losses and return to developing products consumers want. Failure is the rule, not the exception.

Bootstrap: Self-funding, also known as bootstrapping, is an effective way of startup financing, especially when you are just starting your business.

Incubator: A business incubator is a company that helps solve some common problems associated with running a startup by providing workspace, seed funding, mentoring, and training 

Accelerator: Accelerators are focused on early-stage startups and scaling a business while incubators are often more focused on innovation and take up early to late-stage startups. Accelerator programs usually have a set timeframe in which individual companies spend anywhere from a few weeks to a few months working with a group of mentors to build out their business and avoid problems along the way.

Funding Series: 

• Series A Funding: Once a startup makes it through the seed stage and they have some kind of traction — whether it’s number of users, revenue, views, or whatever other key performance indicators (KPI) they’ve set themselves — and they’re ready to raise a Series A round to help lift them to the next level. 
• Series B Funding: A startup that reaches the point where they’re ready to raise a Series B round has already found their product/market fit and needs help expanding. 
• Series C Funding: Companies that make it to the Series C stage of funding are doing very well and are ready to expand to new markets, acquire other businesses, or develop new products. Commonly, Series C companies are looking to take their product out of their home country and reach an international market.

Now we have covered all the topics . hope you have liked our series on Road to Entrepreneurship.

Do comment below to let us know how you love it. share it with your friends on Facebook .

• Tweet
• Share
• Share
• Share
• Share