Investors aren’t just altruistic startup entrepreneurial loving business people. Although they may be genuinely interested in the business, as many angel investors are, they ask for a portion of the business in turn for giving money. Before each round, a valuation of the company pie is typically released. Valuations derived from considerations such as management, proven track record, market size, and risk.
To grow the pie’s circumference, more than a few slices need to be given away. In fact, most of the slices will be auctioned off for funding. Many small business owners with a big idea would rather have a sliver of a massive pie than the entirety of a bite-sized treat.
Please remember that series A, B, and C have nothing to do with the alphabet, rather with the development stage of the companies that are raising capital.
Our friends from The Rest Of Us have created this awesome video that shall definitely help the Startup Entrepreneurs with regards to Everything they Need to Know about Startup Funding! Enjoy!
[This post byfirst appeared on ThugStart and has been reproduced with permission.]