Startup funding explained: Series A, Series B, Series C

Series funding is a crucial aspect of startup growth and development. It consists of three main stages - Series A, B, and C. Seed funding refers to the initial money raised by startups from external entities like angels, friends, and incubators in exchange for equity. After seed funding, startups may participate in Series A funding rounds, where they can raise additional funds in return for preferred stock. This usually involves a valuation process that assesses market size, risk, revenue, customer base, team quality, and proof of concept. The median Series A funding round is $10 million. Series B funding is used for scale rather than development and is awarded to successful startups. It's typically utilized for expansion or M&A activities. The median pre-money valuation for a startup at this stage is $40 million. Finally, Series C funding is usually the last round of funding for startups before they consider going public. At this stage, companies broaden their investor range to include hedge funds, private equity firms, and investment banks. The focus shifts from visionary-type metrics to concrete data like profits and growth.