Venture capital (VC): VC usually invests in some early projects, with relatively mature business model, generally supported by user data, recognized by the market and strong profitability. After obtaining funds, we can continue to expand the market explosively. Investment nodes are generally at the bottom of Death Valley. VC can help start-ups to quickly increase their value, gain recognition from the capital market, and lay the foundation for subsequent financing.
Private equity fund (PE): PE usually invests in some Pre-IPO companies, which have the basis for listing. After PE enters, it usually helps the company to sort out its governance structure, profit model and fundraising projects, so as to be listed at least in 1-3 years.
In fact, there is no strict definition of financing rounds. In order to highlight the key points, we can explain it in one sentence:
Seed wheel: there is only one idea, brush face financing.
Angel wheel: the product has been started but not completed, and the model has not been verified.
Round A: A business model with team, products and data support, leading the industry.
Round B: The business model has been fully verified and the company's business has expanded rapidly.
Round C: Mature business model, large number of users, leading the industry or leading, ready to go public.
Round d, e and f financing: an upgraded version of round C.
Some people may ask, why should we divide several rounds of financing? Isn't it the easiest to complete financing at one time? The main reasons include:
1, I can't find so much money at once (the money invested in different stages is limited);
2. The company does not need so much money when it develops to a specific stage (more money is also hot);
3. The founder of the company doesn't want so much money at once (the previous valuation is low and the equity is diluted).
The amount of financing basically depends on discussion, which is evaluated by the enterprise according to the financial statements predicted by its own business development. Generally divided into the following categories:
Angel investor (AI): It occurs in the initial stage of the company, which means that the company has the initial appearance (prototype) of the product and can take it to meet people; Have a preliminary business model; Accumulated some core users (angel users). At this time, we usually look for angel investors and angel investment institutions. The investment scale is generally 1 10,000 RMB to 1 10,000 RMB.
A round of financing: the company's products have matured, started normal operation for a period of time and have a complete and detailed business and profit model, which has a certain position and reputation in the industry. The company may still be at a loss. The source of funds is generally a professional venture capital institution (VC). The investment scale is generally100000 yuan to1000000 yuan.
B round of financing: after a round of burning money, the company has achieved great development. Some companies have started to make profits. There is no problem with the business model and profit model. It may be necessary to develop new business and expand new fields. The sources of funds are mostly the follow-up investment of the last round of venture capital institutions, the participation of new venture capital institutions and the participation of private equity investment institutions (PE). The investment is more than 200 million yuan.
C round of financing: the company is very mature, not far from listing. Should have begun to make a profit, basically the top three in the industry. In addition to expanding new business, this round also has the intention of completing closed-loop business and writing a story to prepare for listing. The main source of funds is PE, and some VCS before will also choose to follow suit. Investment scale: more than 654.38 billion RMB, generally listed after the C round, and some companies choose the D round of financing, but not much.