For many companies, the path to expansion requires financial backing. This can be in the form of seed funding and series A, B or C funding. Monies are collected from investors in exchange for equity in a company. Seed funding is the earliest stage of funding collected. It is at times considered as funding even before a minimum viable product has been completed. A minimum viable product is a working prototype of a product. In as simple an example as possible, let us say you start a company to create a dining rewards mobile app and once you have completed your business plan and you show it to your family members and your uncle decides to support you with some money to get it started. That is seed funding.
Seed funding and series funding are important to many companies. Companies that are not listed on an exchange or do not have the ability to take a bank loan have to depend on seeking financing from private sources.
Usually after the initial seed funding or seed capital is obtained, the next funding is Series A funding. This is when venture capitalists may be interested and usually preferred stock of the company is issued in exchange for funding.
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