The Typical Venture Capital Funding Schedule

After serving as a physician in private practice, Dr. Lindsay Rosenwald refocused his career on investment in the life sciences and biotechnology industries. Dr. Lindsay Rosenwald maintains expertise in direct investment, asset management, investment banking, and venture capital.

Today, an increasing number of entrepreneurs turn to venture capitalists to fund their ideas. Before seeking out these investors, individuals should have a clear idea of the type of funding they need now and will need in the future. For example, seed capital allows for the creation of a company or product from scratch and is helpful in the “idea” stage. Most venture capitalists avoid this stage of funding. Investors typically start to show interest during the startup stage, in which entrepreneurs have created the company but need funding to continue research and development of the product or service.

The three remaining stages of financing are first round, also known as “series A” or “A round;” second round, also called “series B” or “B round;” and mezzanine, or “late-stage,” financing. First-round funding generally supports the acquisition of a talented staff and helps bring the final product or service to the market. The second round of funding gives working capital to companies that have products or services available but still have not begun to turn a profit. Mezzanine financing allows a company to expand as it becomes profitable.

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