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Equity Stages In Financing Your Business

By Mark Schlarbaum | July 3, 2008

Submitted by: Janet
Author: Dh Roberts

After you have completed your Bootstrapping Round of funding and your business needs have expanded you can now look to the world of Equity Funding to get the money you need to take your business vision to the next stage of manifestation.

Under Equity Financing you have the following Financing Rounds to look forward to:

1. Seed Round

2. Start-Up

3. First

4. Second

5. Third

6. Bridge

The Seed Round: You have to prove a concept during this phase and you must go through a process to qualify for start up capital. In this stage you would be looking to get anywhere between $25,000-$500,00. Your primary source for this stage of funding would be a) Individual Angels b) Angel Groups c) Early-stage Venture Capitalist.

The Start-up Round: In this round you would have complete product development and your initial marketing underway. You would be looking to raise $500,000-$3,000,000. Sources of Funding would be a)select Individual Angels b)Angel Groups c)Early-stage Venture Capitalists.

First Round: In this stage you will initiate full scale manufacturing and sales. You would be looking to raise $1,500,000-$5,000,000. Venture Capitalist would be your source for this level of funding.

Second Round: This would be the round of funding that would address the need for working capital for initial business expansion. $3,000,000-$10,000,000 is the amount of funding that would be entertained during this phase. Venture Capitalist and Private Placement Firms would be the ideal sources to get successful funding from at this stage.

Third Round: This would be the round where your business would need between $5,000,000-$30,000,000 again you would seek out Venture Capitalist and Private Placement Firms.

Bridge Round: This round of Financing is to allow a company to go public within 6-12 months and would require between $3,000,000-$20,000,000. Mezzanine Financing Firms, Private placement Firms and Investment Bankers are usually the ones that would back companies at this stage.

Whatever the Stage or Round of Financing your company or business model may be at there are thousands of firms and individuals that are willing to provide you with the necessary backing that you would need. These sources are there to help you take your company to the next level.

Topics: Janet Schlarbaum, Mark Schlarbaum, Schlarbaum Capital Management |

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