Funding Stage Definitions


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.


  • Amounts: <$100,000
  • Company Life Stage: Pre company
  • Purpose: Idea development and formation of founding team
  • Available data: Little to none
  • Who invests: Founder, Friends and Family; some state programs; contests; crowdfunding; SBIR; equity for service
  • Risk level: Extremely high
  • Expected rate of return: None
  • Examples: Digital Sandbox companies


  • Amounts: $250,000 – $1 million +
  • Company Life Stage: Early development
  • Purpose: 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.
  • Available data: Soft data, value proposition, founder experience
  • Who invests: Founders, Friends and Family; crowdfunding, Angels
  • Risk level: Extremely high
  • Expected rate of return: 50-75%
  • Examples: Knoda, Volunteer Mark

Series A

  • Amounts: $1-3 million
  • Company Life Stage: Development
  • Purpose: Series A usually provides resources to further develop and scale the product; validate the business model (engage customers); and establish time to market
  • Available data: Validation, time to market, initial customer feedback
  • Who invests: Angels, VCs
  • Risk level: Very high
  • Expected rate of return: 40-60%
  • Examples: Divvy HQ, Leap2, MyEDMatch

Series B

  • Amounts: $3-7.5 million
  • Company Life Stage: Shipping product
  • Purpose: 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.
  • Available data: Preliminary revenues
  • Who invests: VCs
  • Risk level: High
  • Expected rate of return: 35-50%
  • Examples: EyeVerify

Series C

  • Amounts: $7.5-10 million
  • Company Life Stage: Product backlog
  • Purpose: 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.
  • Available data: Predictive revenues
  • Who invests: VCs
  • Risk level: Moderate
  • Expected rate of return: 30-40%
  • Examples: Aratana


  • Amounts: $10-20 million
  • Company Life Stage: Profitable
  • Purpose: Mezzanine financing usually helps a company prepare for an IPO or acquisition.
  • Available data: Hard data, net income
  • Who invests: VCs
  • Risk level: Lower
  • Expected rate of return: 25-35%
  • Examples: AMC


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