4. 1. Venture Capitals (Investment fund)
ü VC is not just investors, but is also
mentors and partners who have a
wealth of industry knowledge.
ü The support VCs give range from the
operational to the strategic.
ü A more important area where VCs help
new start-ups is in hiring.
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5. 2. Accelerator/ Business incubator
ü Startup Accelerator provides support through
small amounts of seed capital, mentoring,
training and events for a finite period.
ü Business Incubator supports entrepreneurial
businesses with the provision of resources and
services developed, delivered by a team of
professional managers and staff, and offered both
in the Incubator and through it’s network of
contacts.
The business model is where the Incubator takes a
significant equity share for it’s services; whilst in the
latter case, generally they charge a monthly fee to
participate and utilize the Incubator’s resources over
an extended period of time
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6. 3. Seed & Early-Stage funding
ü A startup requires several rounds of financing before it can generate sufficient
cash flow from sales to finance operations.
ü The earliest funding rounds are seed and early-stage funding. Companies need
these funds to support operations, such as product development, administration
and marketing.
ü Seed funding allows a startup to develop a prototype product and generate
sufficient investor interest for successive financing rounds. Early-stage funding
allows additional operational flexibility over the medium to long term.
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8. Series A
ü Series A refers to the first round of stock offered to
investors during early-stage rounds.
ü It supports a company through the early stages of
building a business, from product development to
hiring to marketing.
ü Because the Series A round is for more significant
cash, investors are usually professional angel
investors or boutique VC firms who specialize in this
first round of financing
ü Amount: Typical It rounds fall in the range of $2-5M,
offer options for 20-40% of the company
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