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This funding stage helps a company grow so that it can meet the various demands of its products and customers. Series B rounds are about taking businesses to the next level, past the development stage. Investors help startups expand market reach.

The process of raising capital through the sale of shares in a company. Equity financing allows a company to obtain funds without incurring debt or without having to repay a specific amount of money at a particular time.

A non-binding agreement that shows the basic terms and conditions under which an investment will be made. It serves as a template to develop more detailed legally binding documents. Typical characteristics include the valuation of the company, the investment amount, and information on liquidation preferences.

Companies that make it to Series C funding rounds are already quite successful. These rounds are focused on scaling the company, growing as quickly and as successfully as possible. Series C funding might be used for acquiring other companies, expanding into new markets, or developing new products.

The rate at which a company is spending its capital, usually per month. Burn rate is a critical metric for startups to understand how long they can operate before needing additional funding or reaching profitability. It's calculated by the formula: Burn Rate = (Cash Balance at Beginning of Period - Cash Balance at End of Period) / Number of Months.

A method of raising funds for a business by selling debt instruments to investors. These could be in the form of bonds, bills, or notes. In return, the company agrees to give the holder of the debt security the principal amount back as well as interest on a specified future date.

A term used in contracts to specify which investors get paid first and how much they get paid in the event of a liquidation event (such as the sale of the company). Liquidation preferences are used to mitigate the risk for investors in case the company does not perform well.

The method by which a venture capitalist or business owner intends to get out of an investment that they are involved in. Common exit strategies include initial public offerings (IPOs), acquisitions by other companies, or the sale of equity stakes.

A short-term debt that converts into equity, typically in conjunction with a future financing round; in effect, the investor is loaning money to a startup and instead of a return in the form of principal plus interest, the investor would receive equity in the company.

A form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. Venture capital generally comes from well-off investors, investment banks, and any other financial institutions.

The initial capital used to start a business. Seed funding often comes from the company founders' personal assets, friends and family, or angel investors. This stage is characterized by high risk and uncertainty, but essential for company formation and initial development.

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares generally have dividends that must be paid out before dividends to common shareholders and the shares usually do not carry voting rights.

A capitalization table is a spreadsheet or table that displays the ownership percentages, equity dilution, and equity value for each shareholder of a company. Typically used in startups and early-stage companies, it is an important tool for understanding the impact of future rounds of financing or exits.

The stage of venture capital financing that follows seed funding. Typically, Series A rounds are used to optimize products and market fit. Investors in this round may include traditional venture capital firms, and valuations are based on progress since seed stage, market potential, and other factors.