Giving away portions of the company you poured your blood, sweat and tears into may be painful. But, as an entrepreneur, selling equity in your startup for cash can be financially beneficial.
Many successful startup entrepreneurs follow a well-worn series of stages in their quest for funding from a first friends-and-family round, moving on to a seed investment and later a venture capital investment. As a business grows and becomes more successful, investors often become willing to invest greater sums in exchange for increasingly smaller amounts of equity.
Related: From Renting Bedrooms on Airbnb to $1.5 Million in Venture Capital: Lessons in Resourceful Startup Funding
The infographic below, from San Francisco-based startup community organization Funders and Founders, breaks down the funding path of a successful entrepreneur, from idea to initial public offering.
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Have you exchanged portions of your company for cash? If so, leave a note below and let us know whether you would do it again and why or why not.
Catherine Clifford
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbi...
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