A venture round or stage is a type of funding round used for financing by startups.
- Series A
- Series B
- Series C
However, in recent years, there has been an increase in granularity, as well as extension of rounds. It's not uncommon to see companies raising Series D, E, or F rounds, and you may also see stages such as Seed+, Series A+, etc.
At a pre-seed stage, the company likely does not have a product in the market yet, so you are investing based on your conviction that the founders will be able to successfully execute on their idea(s). A Pre-Seed round is a pre-institutional round that generally has no institutional investors or has a very low amount, often below $150k. Many entrepreneurs and investors might refer to this as a "friends and family" round.
At the seed stage, a company generally has a product on the market, or they have clear product-market fit. Seed rounds are usually the first rounds of funding a company will receive. Seed rounds tend to be under $2M, but larger seed rounds have become more common in recent years.
Once a startup has track record of sorts (user base, revenue, other KPIs), that company may opt for Series A funding to continue refining their product offering. Often, seed startups have great ideas that generate a substantial amount of enthusiastic users, but they have generally begun monetizing by the time they raise a Series A. Series A rounds are typically between $2M and $15M, and the investors tend to come from more traditional venture capital firms (although these firms have been investing pre-Series A more often in recent years).
Series B rounds are generally growth rounds, where the company has product-market fit, and now they're looking to grow the business. Series B funding rounds are often led by the same investors from the Series A, but generally includes additional venture capital firms that focus on later-stage investing.
Companies that raise Series C funding rounds have already achieved some level of success. These companies look for additional funding in order to expand further, develop new product offerings, or even acquire other companies. At this stage, investing is perceived as less risky, and more investors generally join in– including hedge funds, investment banks, and private equity firms.
In the past, companies often ended their external funding with Series C, however, over the past 10 years, it's become more common to extend to Series D and even further.