Skip To The Main Content

Funding Stage Definitions

What is seed funding? When should I look for Series A? The chart below, with descriptions provided by the Enterprise Center of Johnson County, can help you determine what stage of funding to pursue.

Definitions

Pre-Seed

Seed

Series A

Series B

Series C

Mezzanine

Idea development and formation of founding team

Product development and product/market fit

Product development and validation of business model

Business Development

Acceleration

IPO Prep

Purpose

Idea development and formation of founding team

Seed funding is used for research and development, proof of concept, product testing, prototype development. Companies move from idea to model and begin testing the market.

Series A usually provides resources to further develop and scale the product; validate the business model (engage customers); and establish time to market

Series B funds are often used to scale a business. Additional funding allows the company to complete product development, ship product and create early revenues.

The Series C is often used by a company for operating capital to expand markets, to strengthen the balance sheet or to finance an acquisition.

Mezzanine financing usually helps a company prepare for an IPO or acquisition.

Amounts

<$100,000

$250,000 - $1 million +

$1-3 million

$3-7.5 million

$7.5-10 million

$10-20 million

Who invests

Founder, Friends and Family; some state programs; contests; crowdfunding; SBIR; equity for service

Founders, Friends and Family; crowdfunding, Angels

Angels, VCs

VCs

VCs

VCs

Company Life Stage

Pre company

Early development

Development

Shipping product

Product backlog

Profitable

Available data

Little to none

Soft data, value proposition, founder experience

Validation, time to market, initial customer feedback

Preliminary revenues

Predictive revenues

Hard data, net income

Risk level

Extremely high

Extremely high

Very high

High

Moderate

Lower

Expected rate of return

None

50-75%

40-60%

35-50%

30-40%

25-35%

Examples

Digital Sandbox companies; SparkLabKC

Knoda, Volunteer Mark, Trellie

Divvy HQ, Leap2, MyEDMatch

EyeVerify

Aratana

AMC

* descriptions of funding series compliments of Rick Vaughn, Enterprise Center of Johnson County

Choose your entrepreneur type.

Choose your entrepreneur type.

Browse All
  • iconStartup

    You're a member of the start-up group. Brand new to the entrepreneurial world, your ideas and energy will take you far. Welcome to the family.


  • iconMicroenterprise

    You're a member of the microenterprise group. Your small business is not only your dream job, but also gives you the flexibility to do things on your time.


  • iconMain Street

    You're a member of the main street group. Your entrepreneurial spirit brings people together, providing your customers with a more personalized service.


  • iconInnovation-Led

    You're a member of the innovation-led group. You make the revolutionary ideas that will break through the ceiling. Let our resources get you there.


  • iconSecond Stage

    You're a member of the second stage group. Faster than a speeding bullet, your business is taking off. We have the resources to help your growth and expansion.


  • iconEntrepreneurial Community

    You're a member of the eco-devs group. You're the support system of the economic, small business and community rooted in getting things started. Let's connect.