CAPITAL SEED, BUSINESS ANGELS OR VENTURE CAPITAL.
The first thing we must be clear about are the financing rounds, what they are for and the differences between them.
The financing rounds are a process by which a company manages to get new capital through investors, and not only the founding capital, but also the existing capital that passes from one partner to another. In this process, new members are admitted who acquire a part of the company’s social capital and, therefore, part of their control.
Obtaining financing is very useful, when, for example, it is intended to launch a new service or product to the market, when it is time to expand and approach new markets, when it is necessary to restructure the liabilities through a difficult situation or lack of cash. with which to meet payment obligations, among many other circumstances.
The startups, especially those of a technological nature, have not let the rounds of financing go unnoticed, since they have acquired enormous prominence when it comes to getting in touch with specialized investors and thus have started to weave networks among them.
Funding rounds are usually preceded by an investment that is used to lift the startup from its foundations. It is called seed capital or seed capital and its goal is to turn a brilliant idea into a business. For this, the first thing is to lay solid foundations, with what money is used to do market research, create a business plan, as well as a business structure, and, of course, develop the product.
The amounts that are usually managed for the seed capital are not high and their contribution is decided based on aspects such as the possible value of the project, the risk of the sector to which it is directed or the employees who work. The figure that deals with this investment is usually the business angels, who put money at the beginning and then receive high profits if the project is successful. Usually they are well connected people with market knowledge, so their advice is also crucial for the startup.
On the other hand, Venture Capital is one of the main forms of financing for startups that are in their growth phase and that have already used other sources of funding such as seed capital.
The Venture Capital are usually formed by several partners who are responsible for investing the funds that the firm has. These funds are usually provided by other institutional investors or not seeking high profitability.
These investments seek to participate in the future income of startups, normally controlling between 25% and 30% of them, in addition to obtaining voting rights and / or a position on the board of directors.
Our advice to entrepreneurs who bet on this form of capital raising is that they must begin the path full of patience and knowing that they must devote many hours to find investors and convince them, but all sacrifice has its reward.
Success
