#PRE SEED VENTURE CAPITAL FIRMS SERIES#
Then you use the Series A money to get you through to your Series B and so on. The money you get from that stage adds more time on your clock to get to the next checkpoint-your Series A. If you fail to reach the next checkpoint in time, you lose.Įvery time you raise money, you get a little more time (or runway) for your startup to reach the next checkpoint (i.e. Each time you reach a checkpoint, you get more time on the clock. In the game, you race against other cars and have to reach checkpoints throughout the course before your time runs out. In a webinar with the Founder Institute, the founder of our company compared the fundraising process to the old racing arcade game Cruis’n USA.
Those investments allow founders to fund the growth of their startup as it matures from an idea to a fully operational business, and eventually becomes a large company that can sustain itself or is ready for an exit. As a result, founders look to investors to give them money in exchange for equity (i.e. Without outside funding, it’s very difficult for most startups to sustain, let alone grow fast enough to gain market share. More money than most startups have in the bank, and more than they’re able to generate from revenue alone.īetween salaries, marketing, and product development, you can easily burn through tens of thousands of dollars each month just to operate a startup. Without getting too much into the weeds, I’ll just say that growing and scaling a large business costs a lot of money.
Before we get into the nitty-gritty, it’s important to understand why startups raise money in the first place.
0 kommentar(er)
