Right now, you can witness a gradual rise in the startup culture for over a decade now. This startup culture has made India be the third-ever largest startup ecosystem globally, right after the US and UK. Most of the time, the brains behind these startups will be young graduates from colleges or even someone who left jobs to pursue his dream. No matter whatever position you hold, funding a startup is a serious issue that needs to be taken care of with ease.
Most people are trying to fund ideas all on their own, and others are on the lookout for external funding to get their needs satisfied. Understanding more about the startup funding stages is very important. So, without wasting time, let’s focus on these plans now.
Get along with the pre-seed funding stage:
This is the primary stage of the startup funding process, also known as bootstrapping. This stage talks about the owners using their own financial aid or borrowing money from family and friends.
- This kind of funding stage is for the initial business phrases when the startup hasn’t even begun the operation.
- It is just in the current market testing stage when the idea, along with its feasibility, gets tested.
- The cost will always include funds for building a prototype and constructing a plan for product launch, and then developing ideas for multiple sales and marketing activities.
- The initial phase is pretty early and cannot even be considered the initial grant phase.
- At this stage, owners might have to stay on the job a bit longer than necessary or find a second line of work to put extra pay on the new startup.
Seed funding phase:
Once the pre-sowing phase has been done and dusted, it is time to plant the seed. The first of these stages will be seed funding. Around 29% of new firms will run out of funds while starting bootstrap, which makes basic starting capital for starting and then business operation.
- The seed funding stage is quite similar to planting a tree. The underlying funding will be the “seed” to allow any startup to thrive well.
- The moment you start working with a profitable commercial process like “water,” the startup will grow up into a “tree.”
Venture capital stage:
This is the third stage of Seed funding for startups, and most companies consider this funding stage, no matter how well their businesses are doing. The source of fundraising will involve various rounds of funding or even a series that is followed. It will include Series A, B, C, and D. In every round of this stage, the startup ends up with a higher value and increases the valuation too.
The final stage is the IPO or the Initial Public Offering. Here, the company decides to start working on corporate shares for the public. In this stage, the startup starts to grow and diversify. So, make sure to follow the stages well before proceeding further. The more you get to research, the better points keep coming your way!
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