Why is A round of financing success will determine a set of enterprises of vital importance
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There are many factors that influence the development path of
, and the size of A round financing is one of the most important factors. 10 million U.S. dollars of financing and $3 million, it does change the nature of the company’s development. We know that the company’s recruitment, product development and customer attraction are subject to financial constraints.
is not every entrepreneur start to realize the importance of A round of financing scale, some seed stage entrepreneurs in the process of financing for half of total, only to raise funds to thank A wheel. In fact, this is not a small problem for entrepreneurs and investors. When the market is willing to provide you with a $3 million investment, you are looking for $10 million; then in this case you will appear very ignorant, and missed the opportunity to give you venture capital company. Venture capital company is also the case, if the amount of investment requirements of the enterprise is different from your expectations, you should also investigate and study this, rather than blindly refused.
why is A round so unique?
comparison, why the seed and B round round and A round of business does not exist with the level of uncertainty? This is because the determinants of A round of financing scale than other two determinants of financing scale is more complex and mysterious.
seed wheel financing scale and valuation has a relatively stable standard: financing scale between $1 million to $2 million 500 thousand, while the valuation of the company between $4 million to $8 million.
in most cases, the company in the B round (or C round, D round) financing has begun to generate revenue. At that time, entrepreneurs have been able to quickly identify their own expectations of the scale of financing through the following three points:
(1) a new wind investment company requires a company’s shares of;
(2) the company’s revenue projections for the next year;
(3) valuation can make the company’s development space doubled.
we look back at the A round. Why some enterprises can only be raised to $3 million, while some enterprises can raise $10 million or more in the past four years? NEA (the world’s largest investment institutions) A round of investment of 41 enterprises were analyzed after I put forward three classification about A round of financing scale:
$3 million deal: investors think, "this is an experiment, I love this team and their ideas. But the company also needs to prove to me that one or more of the key assumptions, or need to overcome a number of obstacles in order to get more investment."
$6 million deal: "investors want the company to let me see how much they will be able to produce real gains in the next December, but I’m not sure now 100%, there is not enough information so that I can have more than 8> of them