How does seed funding differ from series funding?
Where pre-seed and seed funding are available to completely new businesses who are starting from practically nothing, Series A, B and C funding is available only to startups that are further along from the pre-seed and seed stages, and basically already established and showing significant growth.
To attract series funding, a business will usually have to be already seen as at least viable, “up and coming” and already growing steadily or rapidly.
Funding in general aims to provide you with the specific amount (and potential support) that is relative to the stage of business you’re in, to give you the best chance of exponential growth to benefit all parties involved. The amount can increase incrementally as your business grows.
The term ‘series funding’ is how it is categorised by amount after pre-seed and seed, following the pattern of the alphabet (Series A, B, C, and so on).
Another key difference between the seed rounds and the series rounds is that pre-seed and seed rounds are usually a one-time opportunity kind of deal. You can only be the new business on the block and have that as an excusable set of circumstances once.
Series A, B, C and so on are types of funding that happen at multiple junctures. They can increase in capital amount with each round, but you can also have multiple rounds at any specific stage. That is, you can have multiple Series A rounds before even moving on to Series B, for example.
This may happen if there is still more to be done in a specific stage, but it simply requires more capital to be done. In that case, investors will want to keep the funding given under the specific category label (Series A, for example) just to make it clear that the business is still technically in that stage.
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