HOW TO MAKE SURE THAT YOU ARE TARGETING THE RIGHT VENTURE INVESTOR

Raising funds is not an easy task, requiring a huge amount of time and effort from startup founders. To use founders’ resources more efficiently, we should contact only those potential investors whose investment focus matches our startup. It is crucial to find the right fit.

There are indeed so-called stage-agnostic investors who invest regardless of the stage of startup development. However, in the vast majority of cases, they specialize in projects of certain stages and invest only in certain funding rounds. Therefore, first of all, we shall find out our startup's stage.

There is neither universal classification nor established terminology on startup stages, so I did my best to capture and categorize the stages and made it balanced and clear (at least less confusing) to use and evaluate where the startup stands.

 Pre-Seed Stage

Characteristics:

• Pre-funding
• Pre-product
• Pre- product-market fit
• Minimum Viable Product (MVP) development

Typically corresponds to the Pre-Seed funding round.

 Seed Stage

Characteristics:

• Trace of product-market fit
“Product-Market fit (PMF) means being in a good market with a product that can satisfy that market.”
— Marc Andreessen
• Product gets traction
• Testing and validating of market assumptions

Typically corresponds to Seed funding round.

 Early-Stage

Characteristics:

• Working product/Product-market fit
• Paying reference customers and revenue growth
• Identified business model
• Proven product ROI

Typically corresponds to Series A/Series B funding rounds.

 Mid-Stage

Characteristics:

• Ability to scale
• Profitable and scalable distribution model
• Expansion into different market segments
• Traction with users
• Well-defined business model

Typically corresponds to Series B/Series C funding rounds.

 Late-Stage/Growth

Characteristics:

• Large-scale operations
• Acceleration of customer acquisition
• Release of new products and services to cover new segments and markets

Typically corresponds to Series C+ funding rounds.

 Leverage Buyout

Characteristics:

• Exit opportunities on the near horizon (3-5 years)

Typically corresponds to Private Equity funding round.

For more information visit https://www.ezventure.co/