financing stages

Steps involved in financing a new venture. New venture financing usually involves different parties at different stages. The terms used vary from country to country, but there are several distinct stages. Seed funding is used at the very beginning of the project when the entrepreneur has the idea but little else. This stage is often financed by the entrepreneurs themselves, their friends and family, or by angel investors. Start-up, or early stage, finance is required, while the company establishes itself, to trade on a commercial basis. The expansion, or development, stage occurs when the company is trading and established; although the company may not be making a profit yet, further financing is required to expand during what is usually a period of rapid growth. Later stage financing may continue to be required, particularly if a company is seeking a listing on a stock exchange.