What are series A, B, C of investments for your business?
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When you are a startup and you are starting your company, the goal is to get operations up and running. To do this, you need to demonstrate the value of your business model; dedicating time to obtain sufficient financing to grow the company, using the support and credibility of your close circle such as friends, family, in addition to the financial resources of the founders.
With the passage of time, you will begin to become clients and you will also need to grow your operations and objectives, so you need to continue raising capital , in the best of cases with rounds that will allow you to continue growing until reaching a scaling stage in national markets international and a future exit (IPO).
This process, in the best of cases, is the one that all startups should follow. Start a financing process from Friends, fools & family , angel investors, seed capital , through rounds Series A, Series B, Series C , the latter, necessary ingredients to scale companies to the big leagues. Although there are no specific parameters on amounts, if there are some particularities that you should know about this type of rounds, that is why we give you the following information:
Round Series A. Usually, these rounds of capital raising are focused on investing in the scaling of companies, therefore, the amounts are higher than those requested in the first stages. This type of rounds can be characterized by seeking amounts between 1 and 5 million dollars, although there may be occasions where the investments are greater.
At this stage, founders must prepare in advance, you must demonstrate traction, your unit economics, that you have shown that you have a market, that the business model is successful and that it works and that you are naturally prepared to scale.
Round B Series. The concern is no longer focused on product development, but on having a greater market reach. Usually a B round is used to grow the company both inside and outside to meet those levels of demand, that is, expansion is sought. For this, resources are required to complete a star product for the market, make the team grow, so resources are required for the acquisition of quality talent; greater investments are sought to drive business strategy, sales, marketing, technology, etc. At this stage the companies are perfectly established.
A round of this type oscillates around 30 million dollars, on average considering the experience of Latin companies. It is evident that at this stage startups (or scaleups) have demonstrated profitability.
Round Series C. At this time, the companies are looking to make a considerable leap. The startup is already operating as a company, consolidating its business and with a product operating.
In the Series C rounds he focuses on scaling the company, growing as quickly and successfully as possible.
As the trade becomes less risky, more investors come into play. In Series C, new investors approach with the hope of investing significant sums of money in companies that are already consolidating, seeking to grow on a global scale. Companies participating in the Series C lift should have established strong customer bases, revenue streams, and proven growth histories. In the end, it seeks to provide liquidity for possible acquisitions, the development of new products or prepare the ground for an IPO. In this type of series, an average of between 50-80 million dollars is usually raised.