Overview
Financing rounds roughly follow the given naming scheme:
- Early-stage companies:
- Series Pre-Seed
- Series Seed
- Series A
- Mid-stage companies:
- Series B
- Series C
- Late-stage companies:
- Series D
- …
Financing rounds with numerical suffices (e.g. Series B-1) usually refer to situations where the same investors, on the same terms, invest additional money.
A party round refers to a financing round with many investors that make relatively small investments.
Venture Capitalists
A venture capitalist (VC) is an investor who provides capital to companies in exchange for an equity stake on behalf of a firm. A firm comprises of the following roles (in order of seniority):
- Managing director (MD) or general partner (GP). The VCs that make the final investment decisions and sit on the boards of directors of the companies they invest in.
- Principal or director. Junior deal professionals looking to become managing directors.
- Associate. Work for one or more deal partners, usually a managing director.
- Analyst. Individuals with similar responsibilites as the associate, though usually less deal-centric.
While some VCs invest alone, many invest with other VCs. A collection of investors is called a syndicate. Most syndicates have a lead investor usually responsible for taking the role of negotiating terms on behalf of the entire syndicate.
Angel Investors
Angels are usually high-net-worth individuals that invest in a company. They must qualify as an accredited investor or have an appropriate exemption to invest. Angel investors that make many small investments to companies are called super angels.
Bibliography
- Brad Feld and Jason Mendelson, Venture Deals, 3rd ed., n.d.