Pre-seed funding is often the earliest stage of startup funding, coming before seed funding and other stages. During this stage, investors provide startups with capital to begin developing products in exchange for equity.
Seed funding, sometimes known as seed money or seed capital, is a form of startup funding offering in which an investor invests capital in a startup company in exchange for an equity stake or convertible note stake in the company. This can often be after pre-seed funding.
A series A round is the name typically given to a company's first significant round of venture capital financing. The name refers to the class of preferred stock sold to investors in exchange for their investment. It is followed by series B, C, onwards as required.
An IPO is an initial public offering. In an IPO, a privately owned company lists its shares on a stock exchange, making them available for purchase by the general public.
Acquisition funding is the financing a company uses specifically for the purpose of acquiring another company. By acquiring another company, a smaller company can increase the size of its operations and benefit from the economies of scale achieved through the purchase.
A management buyout (MBO) is a purchase by the firm's management team. A management buy-in (MBI) is when, on a change of ownership, external management is introduced to supplement or replace the existing management team.
Angel investors are wealthy private investors focused on financing small business ventures in exchange for equity. Unlike a venture capital firm that uses an investment fund, angels use their own net worth.
Venture capital (VC) is generally used to support startups and other businesses with the potential for substantial and rapid growth. VC firms raise money from limited partners (LPs)to invest in promising startups or even larger venture funds.
Private equity, in a nutshell, is the investment of equity capital in private companies. In a typical private equity deal, an investor buys a stake in a private company with the hope of ultimately realizing an increase in the value of that stake.