Entrepreneurship can take many forms. No matter how big or small, one thing all startups need to one extent or another is funding. It’s true whether that comes from cinching in your belt and bootstrapping it or pouring a dump truck of money into it. The more ambitious your project, the greater your needs.
Many of today’s emerging new businesses are riding the leading edge of technology. In this highly competitive field, funding can be the lifeblood of a startup. The difference between skyrocketing to success or plummeting to the depths can be venture capitalists.
Venture capitalists like Carter Reum don’t just make funding available; they can also be instrumental in providing essential guidance and mentoring that can make or break your business. Sometimes the name recognition of a venture capitalist alone can be enough to provide other investors the confidence to get on board.
Even the most “self-made” successes likely have someone they can point to as their inspiration, mentor, partner, or funder.
What is Venture Capital?
If you’re familiar with the most basic concepts of investing, then venture capital is easy to get a handle on. Just as in any case of investing, the investor puts something in with the hope that they’ll receive more in return down the line. In stocks, you hope that those stocks will increase in value and be worth more, or appreciate, before you sell them later.
Venture capital investment is similar, but more hands-on with the venture in question. A venture capitalist wants to see the venture succeed… their investment rides on it. Their investment purchases private equity and they expect to have a say in how the business is run. This is where the guidance and expertise of a venture capitalist like Carter Reum becomes worth every bit as much as the money they’re putting up. Your success means their success.
How Does Venture Capitalism Work?
While every situation can be different, these are the setps to the venture capitalist funding process.
Pre-Seed
Often not included as part of the list of steps, pre-seed means that the founders are just getting started. They’re usually funding it themselves or with the help of family, friends, and other supporters. These additional supporters are not usually funding it with a share of the business, or equity, in mind. Pre-seed can take a long time simply due to the funders’ lack of resources.
Seed
This is the earliest stage a venture capitalist may be involved in; so early that there might not even be an actual product or service yet. It may be just a really solid concept by a company with the skills and experience to do it, but that hasn’t done it… yet. That’s why they need seed funding. The venture capitalist invests in the business in exchange for equity to help get the business off the ground.
If you think of “seed” as the tiny bit that goes into the ground from which an oak tree grows, you’re on the right track. Venture capitalist Carter Reum has benefited from venture capitalism himself. He brings the perspective and experience to meet you wherever you are.
Early Stage
While calling it “early stage” may seem confusing at first, think of it more as, “earliest stage the public sees.”
Series A Funding
At this point, a venture likely has a sample product or service available. With this, market analysis can be conducted and business plans put into place. Plans can be made for how to market or advertise the product or service and how to acquire customers. Some funding may also be diverted to hiring more personnel, conducting further research, or fine-tuning the venture’s product or service.
Series B Funding
This is when the venture is scaling up and expanding into additional markets. Diversifying and differentiating its product lines is also the focus here. By this point, the product or service should be proven viable and could even be profitable. It can take two or three years to get a business to this stage.
Series C Funding
When a business reaches the point of Series C funding, it’s already doing very well. The purpose of the funding is to accelerate the progress from Series B. New products, new markets, and acquiring other companies becomes the objective. The company is already successful, so from here it’s about scaling up quickly and successfully. Carter Reum knows the need for speed and the value of staking your place quickly.
What the Next Step?
There can be additional rounds of funding as well. A business that hits its Series C funding, though, many opt to make their IPO (Initial Public Offering) with stocks. In fact, Series C can the a tool for raising valuations prior to an IPO. Carter Reum is there to help you all along the way.
