Product Managers play essential roles in organizations. It becomes crucial for startups when you have to develop the products from the early stage to the expansion stage. It assists the Product Managers if they know the different stages of startup series funding. Finally, it helps them set the right expectations for the venture and the product.
Product Managers are always in search of new opportunities in terms of the growth of the product. Therefore, it is vital to know the different startup funding stages to earn the best possible profits for your venture. If you are a Product Manager in NYC and want to learn about the different funding stages, you have come to the right place. Keep reading to satisfy your intellect.
Is the earliest stage of the funding that is generally not included in the stages of funding. It is the time when the founders of the company are just starting their operations in the field. Those who contribute to the pre-seed capital are usually the founders, supporters, family, or friends. These contributors are called pre-seed funders. The funding at this stage may happen quickly, or it may take a long time. Generally, the founders of the company are pre-seed investors.
The first official equity funding stage is termed Seed funding. It is like the first official money that a startup or business raises. You can see “seed-funding,” similar to the process of planting a tree that helps grow your business. If you are dedicated and persevere enough with your business strategies, your company will indeed grow into a big “tree.” Seed-funding gives the financial assistance for the steps like market research and product. You can determine the final product and target audience with the help of seed funding.
You must have heard about the angel investors. They are one of the most common investors who invest their money in seed funding. They tend to put their money most commonly in riskier ventures in exchange for an equity stake in the company.
Series A Funding
Investors are not in search of just great ideas but also high return on investment. If you have a clear set of strategies of making money with your venture, you will find it easy to get the first investor for your startup. And getting the one investor makes it easy to let other investors come in.
The value of a startup can range from 10 million dollars to 15 million dollars and above.
The first round of venture capital raises the amount of 2 million dollars to 15 million dollars and above.
Types Of Investors: Investors from traditional venture capital firms are the ones who put their money in series A funding.
Requirements From Investors: The investors should have the required skill set, financial records, and a well-established customer base. Having all of it gets them preferred stock shares after investing their money in the startup.
Series B funding
It is the stage where your startup transforms into a well-established company with the funds it has collected. In this stage, you can introduce new technologies and recruit more workers in the marketing, sales, or tech team.
The value can range from 30 million dollars to 60 million dollars.
It is the second round of venture capital that can generate nearly 7 million to 10 million dollars and more.
Types Of Investors
Private equity firms and venture capital firms help in this kind of funding. The means of crowdfunding can work too. Investors get the preferred shares in return.
Series C Funding
Companies in stage C (final stage of fundraising) have already become successful and are looking for opportunities to tap into new markets or acquire new companies.
If Series C funding has a pre-money valuation of approximately 115 million dollars, you can raise 50 million dollars or more.
Types Of Investors
Hedge funds, private equity firms, and the large secondary group helps in series C funding in return of twice the value of the investment returned.
Tip For An Early-Stage Product Manager
The product manager plays an important role in creating the first product and making it successful in the market. Seeing the product manager’s ability at an early stage will help you decide if he is agile or not. The product manager must properly know the answers to product manager interview questions to easily sail through his work. He must competitively analyze the product and empower the independent decision-making of the teams.
To Sum It Up
Creating a product and making it successful in the market is a challenging process when it comes to startups. Product managers have to face new challenges in the major phases like formation, validation, and growth of the product. When the product manager wants nothing but growth, it surely makes a difference to his career. So, know about the different stages of startup series funding and make the most out of them.