Raising investment is probably the biggest challenge for startups that are just starting out and that is why it is common to look for materials about angel investors and capital Seed. However, little is said about investing in already consolidated startups, such as in series A, B and C investment rounds.
It is important to note that each round takes place at a different moment in the startup's maturity and, therefore, involves different levels of risk, investment and return. During investment rounds, the startup is analyzed based on different criteria by investors, such as the business model, competition, market size and growth potential.
To understand more about each step, we explain them below:
Series A Round
At this stage, the startup has a defined business model, and the market relatively knows the Product/service offered. Generally, the objective of companies is to boost the scale of production, optimize distribution, as well as expand their operations in the market.
The investment value varies between US$ 2 million and US$ 20 million, it is not necessary for the parties to agree on the pre-fixed value of how much of a percentage of the company the contributed capital represents, and discussion of the valuation stay for another round.
However, determining a pre-fixed value is also common in some cases.
Series B Round
In series B, the company is consolidated and fundraising aims to expand the business, improving processes, recruiting talent, creating new departments and conquering new markets.
The contribution values can reach tens of millions, being a valuation higher when compared to the previous ones, and that is why some investors prefer not to pre-fix the company's percentage in Series A.
Series C Round
The objective of the company that enters the series C investment round is to accelerate the company, often being linked to international expansion. This round precedes the opening of an IPO and is carried out by Venture Capital funds, investment banks and Private Equity companies, which invest hundreds of millions of dollars and see scalability potential in companies that are generally already medium-sized.
