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Uzone.id — There are around 150 million startups in the world right now, have you ever wondered how these startup’s journeys start and how they grow? Well, spoiler alert: It didn’t happen overnight.
Just like a kid, startups also go through three major stages. Each of these stages is early stage, the venture-funded or Series A stage, and the late stage. Now, let’s dive into each phase.
The Early Stage
You’ve got an idea, then what? An early-stage startup is launched to evolve an idea with the potential for significant business opportunity and impact.
At this stage, founders should develop the product more fully to determine whether it’s scalable and can achieve product market fit. This stage can be further broken down into 2 points, pre-seed stage and seed stage.
The focus of the pre-seed stage is to define the company’s vision and mission, build a basic version of the product (prototype), and form a small team to bring the idea to life.
“The main differentiator between pre-seed and seed is probably product and pre-product. You have an alpha product you’re still building out at this point or an idea of what it looks like,” said Laith, quoted from RBCX.
After going through this phase, the startup will go to the seed stage. This is when your company evolves the rough product into a working prototype.
It is the time to see if anyone actually cares about your dreams and your future business. You’ll be collecting feedback, tweaking features, and maybe even pivoting. This is when you’re turning that dream into a minimum viable product (MVP). Think of it as the beta version you’re not embarrassed to show people.
Venture Funded or Series A
This stage is when investors are ready to drop money to help your (and your product) grow. It’s typically between USD 2 million and USD 15 million. This startup phase begins when you receive your first Series A round — each round is usually an 18- to 24-month period.
The venture-funded startup phase is all about growth and proving that your business model is sustainable in the long run. You’re leveling up, but with great power comes great responsibility. The money can be used for hiring talent, ramping up marketing, and optimizing your product.
According to Silicon Valley Bank, Series A funding enables you to build out your team and infrastructure.
At this stage, your company is changing positively from having potential growth to being expected to achieve specific goals by investors.
You might raise more Series A funding rounds later, but the first round is usually the most important phase and sets the tone for your startup’s future.
The Late Stage
Once you have already achieved significant growth, hired a more complete team, attracted incremental rounds of Series A funding, and shifted corporate attitude from operating a risky startup to building a company with sustainable growth, then it’s time for you to step up into the next stage.
You’ve made it past the teenage years of your startup. Now, you’re playing in the big leagues, it’s called the late stage.
“At this stage, the company is well-established, has a substantial customer base, and is expanding geographically. The staff count is increasing in engineering, sales, and marketing to meet the growing demands of a rapidly scaling company,” said RBCX.
At this stage, you’re already expanding globally, acquiring other companies, and diversifying your offerings. Maybe your startup is the next unicorn everyone’s talking about.
Startups in this phase are securing Series B rounds, C, or even D rounds. This source of funding includes venture capital firms, corporate investors, and private equity firms.
Once you’re ready, you can start preparing for an IPO or acquisition, because again, it’s about maximizing your valuation and making that money.
