For an entrepreneur, conceiving a start-up idea is like conceiving a child: you treat it with utmost care and hope for all the best thing for it. Indeed, a start-up has many similarities with a new born. Both goes through stages which has striking similarities in them. We’ll take a look at these stages of a start-up in context of a baby.
It all begins with the idea. An idea is like a sperm that acts like a catalyst for the changes that are to happen. Soon all you are thinking about is your idea, your very own little thing and how to make sure it survives in this world full of competition. This is the time that you start to zero on the sources that can be of use in lending you the money that will start you off.
PRE-SEED STAGE (The Birth)
This is the time when you tap on your sources for funds. These usually include your near one as no bank will give you money and investor don’t invest in anything that has nothing to prove their capabilities. You can also approach incubators that helps in turning your idea into reality. You don’t get a big amount of funding at this stage.
SEED STAGE (First Birthday)
Once your start-up start showing some promise, people will be interested to be a part of it. This is the development stage of your start-up, where an investor will invest in you to help you develop a product that will be beneficial in your target market. Angels and early stage VC are usually interested in having a piece at this stage.
SERIES A and SERIES B Rounds (THE GROWING UP)
Once you have been successful in establishing a profitable product, you’ll want to grow your consumer base. This is when the big guns come in to invest with big bucks. The series of funding refers to the class of preferred stock in exchange of which the investors will invest in your company. Investment at this stage can usually go up in millions.
THE PUBLIC OFFERING (The Interview)
Most start-up dream of coming to this stage. This is like interviewing for that job for which you’ve worked so hard till now. Every drop of sweat that fell was to water this moment. You go public with your start-up offering public to openly trade your equity in the stock market by launching your IPO. The success of your IPO determines the value of your stock so, it is of prime importance.
Being your child, you’ll love your start-up and wish of achieving all that one could but not all start-ups are meant to fail. But don’t lose hope. Remember, You have to succeed only once.