It’s important to know about the different types of venture capital. This is especially true if you want to find a firm to fund your start-up, small, or medium-sized company. There are also important requirements that you must pay attention to if you want to get investors from a quality firm.
The Different Types of Venture Capital
There are different types of venture capital funding, according to each business. Based on business needs, we are categorized into six categories. Here is a clear explanation of each stage:
Seed Capital
The seed capital category is for those of you who just want to start a business. Even if you don’t have a product or company set up yet, some venture capitalists are ready to fund at this stage.
The fund may be in small amounts, but it can be used to support the company. For example, to do market research, cover administrative costs, or make product samples.
Startup Capital
This startup capital refers to helping the company develop a working prototype. For example office space funding, staff recruitment, and further market research.
Some venture capitalists are also willing to provide funds at this stage, although it’s not much. On the other hand, startups also have to put more effort into finding firms that are willing to fund them.
One of the things that you can do if you need funds at this stage is to get guidance from business experts so that you can make a profit. Also, show the VC your genius market analysis and its prospects.
Early Stage Capital
Then, what about companies that have been around for two or three years? You can look for VCs who are willing to provide funding for this stage. Usually, companies that have been around for three years already have a management team and products that sell well.
VC funding will help your business grow. For example, to increase sales, expand markets, and increase company efficiency and productivity.
Expansion Capital
The business will not stop until sales increase, but it also needs to enter a new phase. If your company is already established, you still have to look for a VC to help your business grow better.
Expansion capital can help your business enter new markets. If so far it has only been known domestically, it is time to get the ball rolling by looking for the best VCs.
Late Stage Capital
Next is late-stage capital. At this stage, the company is well established with fantastic sales and revenue levels. It is also possible that the company also has a second level of management.
But the business still has to grow bigger. At this stage, you can look for capital to increase marketing and make the company bigger.
Bridge Financing
Some VCs focus on initial public offerings (IPOs), recapitalizations, or purchases. If your company is planning an IPO, the VC will also help with bridge financing, which is financing for the short term where you need to pay a cost for going public.
The earlier a VC funds companies, the greater the risk. But that’s not a problem, you just need to find the best VC firm that is ready to help your business as needed.
Recommended Venture Capital Southeast Asia
Having a business in Asia is not difficult if you have sufficient capital and guidance from experts.
Indogen Capital is one of the best venture capital firms you can trust. With a professional team and a good portfolio, you will get the right support. As a great venture capital Indonesia, this firm is well known in all of Asia.
This is suitable for those of you who want to develop a business in the Southeast Asian market or Asia as a whole. You must consider this venture capital Jakarta. By knowing the different types of venture capital above, now is the time to realize your bigger business.