Startup Fundraising Rounds: What Are The Different Types?

Startups are exciting ventures, full of innovation and potential. However, launching and scaling a startup is capital-intensive, requiring entrepreneurs to secure funding at various stages of growth. To do this, startups typically go through a series of fundraising rounds, each with its unique characteristics and investor expectations. In this blog, we'll walk through the different types of startup fundraising rounds, explaining what each one entails and how they fit into a startup's growth journey.

At Intrinio, we work with hundreds of fintech startups, providing them not only with high-quality financial data but also supporting them along their entrepreneurial journey. We understand that navigating these fundraising rounds can be challenging, and having the right resources and partners in place is crucial for success.

What is a Startup Fundraising Round?

A startup fundraising round refers to a stage where a startup seeks external funding from investors to grow its operations, develop its products, or expand into new markets. During these rounds, founders typically offer equity (shares of the company) in exchange for capital.

Different types of fundraising rounds correspond to various stages of a startup's lifecycle, and they attract different kinds of investors. A company might begin its fundraising journey with personal contacts and smaller investors, but as it grows, it attracts institutional investors like venture capitalists.

The valuation of a startup and the amount of money raised typically increase as it progresses through each round. Investors look for different things at each stage, from a solid team and proof of concept to a scalable business model and strong financials.

Types of Startup Fundraising Rounds

Friends and Family

Before approaching professional investors, many startups begin by raising capital from friends and family. This is often the very first step in a startup’s fundraising journey. At this stage, the startup might only have an idea or a prototype, and it is still very early in development.

Friends and family investors typically invest small amounts of capital to help the founders get started, with the understanding that this is a high-risk investment. These investors may not expect the same level of due diligence as institutional investors, but the founders still need to make sure they communicate the risks clearly and set expectations properly.

Since the startup is likely pre-revenue at this point, the amount raised in this round is usually enough to cover initial costs like product development, legal fees, and market research. It’s not uncommon for startups to raise anywhere from $10,000 to $100,000 during this stage.

Angel Round

An angel round is often the next step after friends and family. Angel investors are typically high-net-worth individuals who provide capital to startups in exchange for equity or convertible debt. These investors are often willing to take on more risk than institutional investors, and they can be invaluable partners by offering mentorship, industry connections, and strategic advice.

The size of an angel round can vary, but it's generally larger than a friends and family round, ranging from $100,000 to $1 million. At this stage, the startup may have a minimum viable product (MVP) or a prototype, but it is still early in its journey, and many operational risks remain.

For many startups, this is the first time they work with experienced investors who can help them build credibility and develop their business plans further.

Seed Round

The seed round is often considered the first "formal" round of funding for a startup. At this stage, the startup has typically demonstrated product-market fit and needs capital to begin scaling operations. Seed rounds can include a mix of angel investors, seed-stage venture capital (VC) firms, and even institutional investors who specialize in early-stage funding.

Seed funding is used for a variety of purposes: hiring key team members, conducting market research, refining the product, and building the infrastructure needed to support future growth. Depending on the startup and industry, seed rounds can range from $500,000 to $5 million.

This round also introduces startups to more structured due diligence and the expectation of building a well-defined business model. Investors in a seed round will often look for traction—whether in the form of user growth, initial sales, or early customer feedback.

Series A

Once a startup has proven its product-market fit, established a user base, and demonstrated some revenue-generating ability, it can pursue a Series A round. Series A is often considered the first major round of venture capital funding. By this point, the company has a working product or service and is looking to scale.

In a Series A round, startups are usually raising between $2 million and $15 million. The funding is used to optimize product offerings, scale operations, and expand the team. Investors in this round are typically venture capital firms with an interest in startups with strong growth potential.

At this stage, investors are not just looking for a great idea—they want a company that has demonstrated the ability to grow and that can scale. Metrics such as revenue, user growth, and market share become increasingly important.

Series B, C, D...

After a successful Series A, many startups move on to Series B, C, and even D rounds. These later-stage funding rounds are meant to help companies continue scaling, reach profitability, and possibly prepare for an initial public offering (IPO) or acquisition.

• Series B: In a Series B round, startups are looking to scale rapidly. This might involve expanding into new markets, increasing sales efforts, and further product development. Series B rounds typically range from $10 million to $50 million, and the company is expected to show a significant path toward profitability.
• Series C and beyond: As the company matures, it may raise additional rounds (Series C, D, etc.) to fuel growth, acquire other companies, or enter international markets. Each successive round typically brings in larger sums of capital, ranging from tens to hundreds of millions of dollars. At this stage, the company is considered a high-growth business with a well-established market presence, and it is either approaching profitability or has already reached it.

Intrinio - A True Partner

At Intrinio, we support hundreds of fintech startups through these critical fundraising stages by providing them with quality data and guidance. We understand that startups need more than just financial data—they need a partner that can provide strategic insights, guidance, and tools to help them scale. From helping startups get the data they need to power innovative financial applications to offering flexibility with pricing, we're here to help support you on your journey.

We provide startups with cutting-edge financial data, advanced APIs, and expert support so they can stay ahead of the competition and manage their businesses effectively. Our data fuels startups across various sectors, including those in investment research, financial planning, and fintech development. Partnering with Intrinio gives startups the tools they need to impress investors, optimize their business models, and drive long-term success.

Conclusion

Navigating startup fundraising rounds is challenging, but understanding the different types of rounds—and what each one means—can help founders plan their path to success. From friends and family funding to large Series C or D rounds, each step provides critical resources that help startups scale. At Intrinio, we're proud to be a trusted partner for startups, providing not just data but also the support and flexibility they need to thrive in a competitive environment.

Whether you're a fintech startup looking for reliable financial data or an investor seeking data-driven insights, Intrinio is here to support you. Let us help you on your journey to success.

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