Whether your startup is just starting out or growing to scale, you’ll need outside capital to keep the lights on and fuel growth. The right startup funding strategy will help you make critical decisions about how much to invest, and which types of financing will support your business’s goals.
Startup funding options can range from friends and family to angel investors, venture capital (VC) firms, and crowdfunding platforms. Each has its own specific investment criteria, eligibility requirements, and implications for your company’s ownership and control.
Investors typically demand more substance than in the seed stage, including evidence that your product has market demand, a viable revenue model, and traction. This could include customer testimonials, pilot programs, and financial projections. They’ll also want to assess your team’s expertise and experience.
At the Series A level, your startup must have a well-developed business plan and have proven that you can deliver on your promises. This might include demonstrating that your product has scalable market potential, a strong management team, and consistent profitability.
Startups that raise Series B and beyond have proven their business models and demonstrate solid traction. They are often seeking additional funds to expand to new markets or acquire complementary companies. This phase usually involves further dilution of the founders’ stakes and may require that you take on debt financing to meet investor expectations.