<aside> 👀 Keep an eye on…
Equity represents ownership in a company, often reflected through shares or stocks. Having equity means having a stake in the business's performance and future profits. It entitles shareholders to a share of the company's earnings and grants them the right to participate in important decisions about the company's direction and management through voting rights.
A valuation is the assessment of a company's worth, considering factors like assets, revenue, and growth potential. It's vital for attracting investors and making strategic decisions.
The earliest stage of funding for startups, involving small amounts of capital often from founders, friends, family, or organisations (e.g. Edinburgh Innovations) to validate a business idea or develop a prototype.
The next stage of funding after pre-seed, typically involving larger investments from investors to help launch the business, develop a minimum viable product, and begin initial operations.
Series A, B, and C funding are successive rounds of financing for startups. Series A follows seed funding, Series B supports further growth, and Series C fuels rapid expansion or prepares for an IPO. Each round marks a milestone in the company's development, with investors seeking evidence of progress and potential returns.
An Initial Public Offering (IPO) is when a privately-owned company sells shares to the public for the first time, becoming publicly traded. This usually happens after Series C, if at all.
<aside> 💬 “Far and away the best source of finance for a business is revenue from customers. Most other sources – especially equity investment, and loans – have strings attached.”
- Jonathan Harris (Editor, Young Company Finance)
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