Different Stages of Funding
1. Ideation and Conceptualisation: Founders plan their business at this stage. Brainstorm, identify market needs, and create the business concept.
2. Market Research: Startups research their target audience, competition, and market gaps before seeking funding. This phase refines business strategy and concept.
3. Formation and Teambuilding: The founders assemble a skilled team to execute the business plan. A strong team attracts later-stage investors.
4. Minimum Viable Product Development: Startups build a basic version to show off their product. Proof of concept feasibility is crucial in this phase.
5. Initial Popularity: Startups seek early popularity, customers, and feedback. This stage verifies product-market fit and demand.
6. Market Validation: Validation checks user feedback, market response, and KPIs to ensure the product or service is needed.
7. Improve Company Model: Based on feedback and market validation, startups optimise their business model, pricing method, and approach to deliver value.
8. Product Version: Continuous product or service improvement based on user feedback and market dynamics. Enhancing features, fixing issues, and staying competitive requires iteration.
9. Planning for Scalability: Startups identify operational bottlenecks, optimise processes, and plan for increased demand to scale.
10. Paperwork and Pitch Preparation: Entrepreneurs create detailed business plans, financial projections, and effective pitch decks. This documentation is essential for investor outreach.
11: Investor Networking and Outreach: Founders network, seek mentorship, and engage with investors. Obtaining funding requires investment community relationships.
12. Official Seed Phase Announcement: Startups notify their seed round to show investors they want funding to scale.
13. Pitch and Due Diligence: Investors evaluate the startup’s functioning, potential for growth, and team after founders pitch it.
14. Negotiation/Term Sheet Agreement: Effective pitches lead to investor talks. Both parties negotiate estimation, capital stake, and shareholder rights.
15. Seed Round Closing: Legally closing the seed round is the last step. Investors become stakeholders after all agreements are signed and funds have been allocated to the startup.
While funding sources are important, these stages highlight the key activities and significant events a startup undergoes from inspiration to seed financing.
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