Venture Capital is a type of funding provided by investors to startup companies. Startup companies are believed to be able to provide big profits or prospects in the future. Venture capital companies can provide funding to companies, but there are no restrictions on providing funding. The company has the right to provide funding up to two to three times. So, here are the types of funding that can be done:
1. Seed Capital
In the early stages of funding, usually VCs will provide a type of seed capital funding to startups. At this stage, startups are often still in the early process of development or just starting out. It could be that the startup doesn't have a product yet, and the company isn't even well organized. VC will also provide small amounts of funds according to the company's initial needs, namely funding that is usually used to conduct market research.
2. Startup Capital
This type of funding in venture capital is providing capital or funds to startup companies that already have their own products after undergoing the initial stages. Here, VC will provide capital to startups to start the next stage, namely recruiting team members, conducting further research and finalizing the product or service to be ready for marketing.
3. Early Stage Capital
At this stage, startup companies have experienced development with good statistical prospects for the next few years. Also, it has been able to have a complex organizational structure. The company also has its own office to take care of all kinds of activities related to the progress of the production process. Venture capital will provide an injection of funds in the type of early stage capital where these funds can be used to improve the quality and quantity of sales, develop productivity and improve startup efficiency.
4. Expansion Capital
Expansion capital will be given when the startup is fairly stable and ready to expand. Furthermore, venture capital companies will provide assistance to companies to develop new market coverage or maximize existing markets. At this stage, startup companies must be good at selecting and finding venture capitalists who are competent and able to build the company quickly.
5. Late Stage Capital
This last type of funding can be used as funding to increase capacity and increase company capital. At this stage, the startup company has reached a good level and has been able to produce good results. Funding at this stage is urgently needed so that startups can still increase productivity and maintain even better performance in the future.