Investment rounds are diverse and tailored to the funding needs, growth stages, and strategies of startups. Each type offers specific benefits and structures to align with business goals.
Grant
Grants are financial awards provided by governments, institutions, or organizations. Unlike other funding, grants do not require equity or repayment. They are often used to support innovation and research.
Example: European Innovation Council (EIC) grants.
Angel
This round involves funding exclusively from angel investors, who are individuals investing personal wealth to support startups in their early stages.
Seed
Seed funding typically ranges from €1-4M and is secured within two years of a startup's foundation. It helps establish the business and build initial traction.
Series A
Series A rounds involve funding of €4-15M, generally used for scaling the business, expanding teams, and refining the product or service.
Series B
Series B rounds, ranging from €15-40M, are aimed at further scaling operations, entering new markets, and increasing revenue.
Series C
Series C funding, between €40-100M, is used to expand aggressively, often for market dominance, acquisitions, or significant infrastructure investments.
Megarounds
Megarounds involve investments of €100-250M, typically from late-stage VCs, corporates, or private equity, supporting mature startups with rapid growth plans.
Megaround+
Rounds exceeding €250M, used by highly established startups or scaleups for expansive global strategies.
Early VC
This refers to investments of €2-20M where the round type is unspecified, usually happening in the early growth stages of a startup.
Late VC
Late VC rounds occur five or more years after a startup’s launch or in unspecified rounds after Series A, B, and C.
Growth Equity
Growth equity rounds involve $100M+ investments in fast-growing companies, often a mix of primary and secondary funding. Investors may include private equity, growth equity firms, VCs, or corporates.
Acquisition
Acquisitions involve purchasing a majority (50-100%) stake, gaining control of the company. Transactions are recorded upon announcement and finalized later.
Buyout
Buyouts involve 30-100% acquisitions, typically led by private equity firms aiming for restructuring or scaling.
Merger
A merger occurs when two companies combine to form a single legal entity on agreed terms.
Example: Daum Communications and Kakao Inc.
Debt
Debt rounds involve loans where startups borrow money with an agreement to repay with interest. This is common in industries like real estate and manufacturing.
Convertible
Convertible notes or loans allow investors to convert their investments into equity at a later stage, often during subsequent funding rounds.
Lending Capital
This funding type provides working capital to startups offering lending or mortgage services. Banks or other financial institutions are common sources.
Example: LendInvest.
Media for Equity
Media companies exchange advertising or communication services for equity in startups, helping with branding and visibility.
Private Placement
In private placement, public companies sell shares privately to select investors like family offices or institutions rather than on the stock market.
ICO
Initial Coin Offerings (ICOs) involve raising funds by selling cryptocurrency tokens, often for blockchain-based startups.
IPO
Initial Public Offerings (IPOs) mark a company’s debut on the stock market, allowing public investors to buy shares.
Post IPO Equity
Equity rounds occurring after a company has gone public, allowing further capital infusion.
Post IPO Debt
Debt rounds for publicly traded companies, functioning similarly to private debt agreements.
Post IPO Convertible
Convertible loans issued after a company’s IPO, offering flexibility for investors.
Secondary
Secondary rounds involve purchasing 0-20% ownership by buying shares from existing investors instead of the company issuing new equity.
SPAC IPO
This round combines a SPAC (Special Purpose Acquisition Company) merger with a public listing, allowing startups to go public via acquisition.
Spinout
Spinouts are startups originating from universities or research centers, often involving licensing or equity agreements. They leverage university-developed technology but exclude corporate spin-offs.
Example: A startup commercializing research from Oxford University.