Specifically, the funding rounds can be distinguished in the following stages:
1. Capital Seed - Seed Capital
This round is the first stage of financing, consisting of the amounts of modest investment fund product development or service, including market research, patent applications, developing a business plan and the establishment of a management team.
Valuations at this stage are driven by subjective factors, including the purpose of the value of the company, employees, evaluation of intellectual property, market launch plan, performance, risk and the fickleness of the sector.
During this stage, it focuses on the feasibility of the idea and preparing the company to attract investors because few venture capital organizations invest in companies at this stage.
The sources of such funding are -
· The personal money (bootstrapping) that is best for people with high risk tolerance, people with lots of money or property or people who need little money to develop their businesses.
· The investment from friends and family (Friends & Family). It is a pre-seed capital round where entrepreneurs project receives funding from family and friends who are assuming the risk and business failure robable personally stage. Usually it involves a modest amount of money. You have to weigh the impact on their personal relationships. http://www.forbes.com/sites/brentbeshore/2013/02/19/the-non-entrepreneurs-guide-to-startup-funding/
· The investment of Business Angels
o Business Angels want to invest and help entrepreneurs to start, and then receive a large return on your investment. They are individual or grouped investors, usually entrepreneurs or corporate executives, who bring their capital in a private capacity and its expertise and network of personal contacts, in order to obtain a capital gain in the medium term.
· Micro-VCs are an emerging group of professional investors who invest money from a fund other people's money, focusing on the companies in this etapa.http://www.forbes.com/sites/martinzwilling/2011/04/30/primer-on-funding-trends-for-early-stage-startups/
· Super Angels are Business Angels have begun to raise funds from other investors, but only invest between $ 10,000 and $ 50,000 a beginning. http://www.forbes.com/sites/martinzwilling/2011/04/30/primer-on-funding-trends-for-early-stage-startups/
· Accelerators are places where companies can congregate at low cost and counseling and a modest amount of financación. Before choosing an accelerator, the company has to assess whether the program is established, if the program provides the required training or if your company has a high growth potential (that is optimal for a high growth potential who want access to a network capital and mentors.). Mentors must be known and philosophy of the accelerator. http://www.forbes.com/sites/martinzwilling/2011/04/30/primer-on-funding-trends-for-early-stage-startups/
· Banks, incubators and co-working spaces are not the best resources for financing startups. Banks are regulated and require collateral. Incubators and co-working spaces are usually for-profit organizations that incubated companies in their early stage of development but usually do not have as many resources as accelerators. http://www.forbes.com/sites/brentbeshore/2013/02/19/the-non-entrepreneurs-guide-to-startup-funding/
2. Round Serie A
The A series is the first stage of institutional funding, which consists of one or more Funding This venture capitalists. These investors participate as minority in order to help the company grow and increase its market value so you can resell your participation and get a capital gain. The company should generate income and valuation at this stage should reflect the progress achieved in the capital of the round of seed capital. The goals for this amount of funding are the development of the company and the recruitment of gifted personnel, achieving goals, product validation and attracting investors for the next stage of funding. Normalemente this round does not exceed 5 million euros.
3. Round Series B
The B series is an amount greater than the Series A investment, because at this point, the project is completed, the technology risk is determined and revenues have begun. The assessment is based on subjective and objective data, including human capital, technical resources, intellectual property, goals achieved and valuations of comparable companies. The goals for this series of financing often product development, increasing incomes and creating extra value. Normal amounts of this round is usually between 5 and 10 million euros.
4. Series C Round
Funding for the C series can strengthen the balance sheet to provide profitable capital finance an acquisition, develop other products or prepare the company for an exit to the market. The company usually predictable revenue and provide justification for their assessment. The value of this round may be between 10 and 250 million euros.
You should also consider subsidies and public aid available to encourage compliance with a particular goal. For example, there are loads allowances and bonuses of Social Security contributions. Also many public organizations offer loans and direct loans with reduced interest rates and support for stable employment creation or promotion of economic activities of interest to the legislator.