In today's video of startup 101 series, we will talk about different startup funding rounds, what is the difference between seed, angel, series A, series B, series C funding rounds, what is an initial public offering (IPO) and what are the different terms and conditions required to fulfill in every stage.

00:00 Introduction
00:48 Seed and Angel Round
02:09 Series A Round
04:20 Growth Capital/Bridge Round
04:36 Series B Round
05:47 IPO

Seed and Angel Round: Seed or Angel funding is usually the first stage of funding that a startup raises. Seed funding is secured when your startup is basically just an idea and there is little to no traction in terms of customers and a small team. The next is the Angel round when you start marketing your product and go to the market and start looking for customers. At this stage, there are no future projection or plans as the product is not yet rolled out for the customers. While raising both seed and angel funding, the startup is just focused on building its business and establishing its company. In a typical seed or angel round, a startup can raise anywhere between $500,000 to $1 million.

Series A Round: Once your startup is ready with the product prototype, has a proper working mechanism and a few customers, that's when you are ready for institutional investment. As your company shows growth and has something to show in terms of revenues and sales, you raise Series A round from the institutional investors like venture capitals (VCs). At this stage, the startup is ready to hit the market and ready to scale. As the VCs come into the picture and business starts to get serious, more rules and regulations are set in place. Along with the investment, the investors also demand board seats in order to bring a structure into the company and formulate a plan of growth. During this stage, you give future projections to the investors as to what is the revenue, sales or customers you will reach before you can raise the next funding round which is Series B.

Growth Capital/Bridge Round: Growth Capital or Bridge round of funding is raised when a startup falls short of the milestone they had set to get to the next funding round. They raise additional funding from their existing investors in order to achieve the required milestone which will enable them to access the next bigger round of funding like Series B or Series C.

Series B: This is the next bigger round of funding and while there is no set of defined rules, this would generally include bigger goals and growth projections for the future which would require more funds compared to previous rounds. As the funding rounds get bigger, the involvement of VCs also increases and the startup grows at a much faster pace.

IPO: IPO is similar to a funding round but instead of raising from institutional investors, the company raises the funds from the public. This means that now, common people can invest in your company and you can raise a lot more capital than was possible only from institutional investors.

Credits
Music: Corporate Business Music by Infraction https://youtu.be/wGqBrJMB-Zs

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