THE KEY STAGES OF CAPITAL FUNDING


As an investor, whenever you plan to fund a business, you should have a clear idea about the stage in which that company lies in terms of development. Only then can you expect to make a proper decision about funding it.

There are five distinct stages of capital funding. They are,

  1. Start-up stage
The freshly formed new companies are considered to be in this stage. They do not have a distinct business history in the market. Finding an investor in Texas at this stage can be quite a difficulty. So, at this stage, the companies are mostly funded by themselves or their family and friends. Sometimes, angel investors may take interest and agree to fund them.

  1. Seed or Early stage
This stage often involves the investment of less than $5 million. At this stage, a network of high net-worth individual i.e Angel investor or early-stage venture capitalists usually fund the business that seems quite promising and have key customers but have not yet succeeded in getting much cash flow.

  1. Growth Stage

Growth stage company funding is for the companies that are already well settled in the market and have a good amount of loyal customers and profit pool. The funding is done only to increase market penetration. Venture capitalists are the most interested ones to help the companies progress by funding in this stage.

  1. Late Stage
At the late stage, the companies that are established in the market are funded. They usually need a $10+ million raise for some strategic initiatives. This may include investment in sales, overseas expansions, major infrastructure buildouts etc. This helps them get major advantages over their competitors. Venture capital funds Texas are easily available for late-stage funding.

  1. Buyouts and Recapitalizations

This stage is a kind of modern-day barter system. In these, the existing shareholders of the company sell some or all of their shares to the venture capitalists in exchange for money. It is gaining popularity among pre-established companies nowadays.

That’s it. These are the stages in which capital funding is made. Analyze them to your advantage and see which stage should you invest your money into.



Location: Austin, TX, USA

Comments

Post a Comment

Popular posts from this blog

WHAT NOT TO DO WHILE PITCHING AN ANGEL INVESTOR?

Image
Startup funding in Texas is a very tricky issue. Every entrepreneur wants to make sure to find the perfect investor that can help them start their dream business and take it to great heights. When you find yourself an angel investor and are trying to attract him into funding your business, you have to be careful in some matters. Lest you will lose the opportunity. Listed below are a few things that you should avoid doing when pitching an angel investor. Forgetting to research on your investor The basic rule for a meeting with someone new is to do a quick little research on them so that you get to know about their personality, likes and dislikes beforehand. The same is applicable in business. Research and know about your investor so that you can avoid doing or saying anything that the investor may not like. Giving too much detail Yes, you are required to present your business plan in detail to the investor. But it definitely doesn’t mean that you
Read more

A SIMPLE GUIDE TO ANGEL INVESTORS

Image
If you are looking for high net worth individuals Texas USA  to fund your business, you have come to the correct place. Understanding the type of investors and being one is a very typical task in particular. So, here we have a simple guide for you to get a better understanding of angel investors. What are Angel Investors? Angel investors are individuals that provide capital for startup business funding. The investment may be one time or in the form of ongoing injections. They usually invest in the business in exchange for ownership equity or convertible debt. They may also invest through crowdfunding platforms or form networks such as Angel Networks Austin Texas to pool in the capital. Where did they originate from? The term ‘angel’ came originally from Broadway theatre which would have shut down if not funded. The wealthy individuals who funded the theatrical productions were called ‘angels’. William Wetzel, a professor at the University of New Ham
Read more

THINGS YOU MUST KNOW BEFORE RAISING FUNDS FOR YOUR BUSINESS

Image
If you have just stepped into the field of business, you might definitely be having to raise funds discussions with your team to give your business a good start. But, all this enthusiasm and excitement will go in vain if you go unprepared in front of the investors. So, here is a list of things that you must know prior to raising funds for your business. Understand your product The product that you want to sell belongs to you from the very beginning. So, it is apt for anybody to expect from you to have complete knowledge of it. You should be well familiar with your product and know about its uniqueness, pricing, attraction etc. If you cannot answer a few common whats and whys about your product, you can never series A funding . Be aware of your market Knowing about your market is very important to demonstrate the investor about your credibility, seriousness and good preparation. You should be well aware of the target and the competition th
Read more