Searching and reading about funding, I see a lot of people referring to different rounds of funding (related to a given stage the startup is at). Still, I can only find limited information on the common investment/equity tradeoffs negotiated at each stage.
Since it's crucial to understand this to do proper research, I want to verify my understanding:
- Early stage funding / FFF (friends, fools & family): to help bootstrap the company and put a minimal product out there. The goal is to prove there is a market and it's a valid value proposition. 10 to 15% equity tradeoff, mostly 50k-100k investment
- Seed funding: to expand marketing and product development efforts. 20 to 40% equity tradeoff, usually under 500k investment.
- Series A: huge impact on sales efforts, main goal is to start the revenue streams. 50 - 70% equity tradeoff, < 2M investment;
- Series B and C: to prepare for IPO or other exit strategies. Don't know usual equity tradeoff nor common investment range.
Am I totally off?
Insightful answers and pointing me to relevant info are very welcomed.