Venture Capital (VC): VC usually invests in some mid- to early-stage projects, the business model is relatively mature, generally supported by user data, has been recognized by the market, and has strong profitability. After obtaining funds, it can further develop the market and continue to explode.

increase.

The investment node is generally at the bottom of the VALLEY OF DEATH.

VC can help startups 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 companies in the Pre-IPO stage. The company already has the basis for listing. After PE enters, it usually helps the company sort out its governance structure, profit model, and fundraising projects, so as to make at least

Available on the market within 1-3 years.

In fact, financing rounds are not too strictly defined.

In order to highlight the key points, we can explain it in one sentence: Seed round: There is only one idea, and it relies on face recognition to raise funds.

Angel wheel: has started but has not yet completed the product, and the model has not been verified.

Round A: Has a team, a business model supported by products and data, and a leading position in the industry.

Round B: The business model has been fully verified and the company’s business is expanding rapidly.

Round C: The business model is mature, has a large number of users, and has a dominant or leading position in the industry, preparing for listing.

Series D, Series E, and Series F financing: upgraded versions of Series C.

Nowadays, there are more and more rounds of financing. Ofo announced in 2017 that it had completed an E-round financing of over US$700 million.

Some people may ask, why is it divided into several rounds of financing? Isn’t it easiest to complete the financing in one go?

The main reasons include: 1. Unable to find so much capital at once (the money invested in different stages is limited); 2. The company does not need so much money at a specific stage of development (more money is too hot); 3. The founder of the company

People are not willing to ask for so much money all at once (early valuations are low and equity dilution is high).

The amount of financing is basically based on negotiation and is evaluated by the company based on the financial statements of its business development forecast. It is generally divided as follows: Angel investors (AI): occurs in the company's start-up period, which means that the company has a preliminary look of the product (prototype)

), you can use it to meet people; you have a preliminary business model; you have accumulated some core users (angel users).

At this time, it is usually necessary to find angel investors and angel investment institutions.

The investment level is generally between 1 million RMB and 10 million RMB.

Series A financing: The company's products have matured, started operating normally for a period of time, have a complete and detailed business and profit model, and have a certain status and reputation in the industry.

The company may still be losing money.

The source of funds is generally professional venture capital institutions (VC).

The investment level is generally between 10 million RMB and 100 million RMB.

Series B financing: The company has achieved greater development after a round of burning money.

Some companies are already turning a profit.

There are no problems with the business model or profit model.

It may be necessary to launch new businesses and expand into new areas.

Most of the funding sources come from the previous round of follow-up investment from venture capital institutions, the addition of new venture capital institutions, and the participation of private equity investment institutions (PE).

The investment level is more than 200 million RMB.

Series C financing: The company is very mature and is not far from going public.

It should have started to make profits, and it is basically among the top three in the industry.

In addition to developing new businesses, this round also has the intention of completing the closed business loop and writing a good story to prepare for listing.

The main source of funds is PE, and some former VCs will also choose to invest.

Investment level: more than 1 billion RMB. Generally, companies go public after Series C. Some companies also choose to raise Series D, but not many.