Question 86

Following are the conventional stages of startup funding:
A Initial Public Offer(IPO) issue
B. Procurement of mezzanine financing
C. Venture capital funding
D. Angel Investor financing
E. Seed capital acquisition

Choose the most appropriate answer from the options given below that shows right sequence

Solution

E. Seed capital acquisition: Seed capital refers to the initial funding required to start a business or project. It typically comes from the founders' personal savings, family and friends, or early-stage investors who believe in the idea or potential of the business.

D. Angel Investor financing: Angel investors are individuals or groups who provide funding to early-stage startups in exchange for equity or a stake in the company. Angel investors typically invest their own money and often provide mentorship and guidance to the entrepreneurs.

C. Venture capital funding: Venture capital (VC) funding is provided by specialized investment firms or venture capital funds. These firms invest in startups that have demonstrated significant growth potential and offer high returns on investment. VC funding is usually provided in multiple rounds, with each round aimed at supporting the company's growth and expansion.

B. Procurement of mezzanine financing: Mezzanine financing refers to a hybrid form of financing that combines elements of debt and equity. It is typically used by startups or companies in the later stages of development to fund expansion, acquisitions, or other major initiatives. Mezzanine financing often involves higher interest rates and may include options for converting debt into equity.

A. Initial Public Offer (IPO) issue: An IPO refers to the process of offering shares of a private company to the public for the first time. This stage occurs when a company has reached a level of maturity and growth that allows it to meet the requirements for listing on a stock exchange. An IPO provides the company with access to significant capital from public investors.

Therefore, the correct sequence of conventional stages of startup funding is E, D, C, B, A.


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