Stages of Startups

23 August, 2021

We all know that there is a series of funding rounds in startups’ lifecycles, but so far there are many debates on how to divide and define each phase of the development phases of startups. Some like to divide them this way

  1. Pre-series A
  2. Series A
  3. Post-series A

But in general, there are three main funding stages the startup goes through starting from the idea

Pre-seed stage
It starts with the ideation stage, the whole journey starts with an idea, but once the business and the product-building is started you will find yourself in this category.

This funding stage or round is for early-stage startups that are still developing their minimum viable product, aka (MVP). Also known as the prototyping stage, the startup goes through this level to initiate the building of its product and to ensure and maximize its future fundraising opportunities through building the core team, testing and getting the feedback to move to the next round positively and properly, and prepare for future stages beyond the prototype. 
 

Seed stage
The naming of each stage depends on the progress made in the development of the startup 


Series A
During this stage the company must complete a complex transition: from a company with a great offering of scalability to a company with a great offering that is rapidly and predictably scaling. At this stage, the company should have a working product, a proven product ROI, and paying reference customers. There might be a sales team, but it's not that advanced. The company at this stage could dramatically scale revenues.

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Series B and C

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Series B and C are not much different from series A as they're considered to be the following rounds of financing for a business by private equity investors or venture capitalists.

Series A, series B, and series C

  1. I combined these three funding stages in one because they are a little similar. It's a great feeling when you start seeing your baby startup growing in front of your eyes, especially when you’re backed up by your cofounders and the team. But sometimes the critical milestone lies at this developed stage, and sometimes entrepreneurs lose it only after getting too close.
  2. Each startup is meant to go through the previous funding stages in order to reach its goals, but defining each stage with its requirements entails the entrepreneurs to be well prepared and not rush into making the next stage before guaranteeing that they have finished the previous one successfully.
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