The difference between pre-seed, seed, and series A, B, and C: Everything a first-time founder needs to know about the structure, requirements, payout amounts, and process of funding rounds.
You may already know just how long and difficult the fundraising process is. Despite its challenges, when successful, you can proudly walk away with all the money you need to enable your start-up to grow and flourish. Only the luckiest few can raise all the money they need from the generosity of their friends and family alone; the rest of us need to raise rounds of funding – which often ends up taking more time than expected. Now, clearly there’s no doubt in your mind your start-up is the next big thing, but convincing other people to invest their hard-earned cash into it, understandably, isn’t easy. It takes a lot of hard work to raise the money you need at the same time as continuing to run the business – particularly if you are a sole founder. Not only that, but equity funding also means that your investors are entitled to know and have a say in how your company is run. Did you know that Travis Kalanick, the founder of Uber, was ousted from the company by its investors?
However, despite its challenges, thousands of start-ups successfully raise funding rounds every year and prove that the rewards outweigh the risks and potential failure. So, just how do the different funding rounds work?
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