What Start-Ups Need to Know about Venture Capital

Some of today’s most successful businesses began as start ups. From Apple to Facebook, successful start ups have revolutionized consumer’s lives and made significant impacts on the economy by creating jobs. Venture capital is a large loan used to broaden a product or services’ scope, thus making it more accessible to potential customers. This loan can be up to $50 million. Typically, venture capital funds are divided into two categories: growth stage and late stage.

Growth Stage Venture Capital

Growth stage venture capital involves funds between $5 and $25 million. This stage of funding comes after a start up has raised seed money to produce products or perform services that yield high volume revenue. Growth stage venture capital can be especially useful for laying a foundation of brand recognition and developing a strong executive team. This growth stage can last a few years and it is an opportunity to streamline a start up’s procedures—from manufacturing to corporate structuring.

Late Stage Venture Capital

Late stage venture capital normally does not go above $50 million. In most cases, if a corporation requires more than $50 million, it’s best to open shares up for public purchase on stock markets. A good rule of thumb for start ups seeking this amount of capital is to generate annual revenues of at least $20 million. This stage of funding is helpful for investing back into a company so that profits can be maximized and marketing campaigns can be launched to reach a broader consumer base.

Our team at RJ Funding Services (also known as Rafter J Funding Services) offers a number of funding solutions for businesses of all sizes, including those in need of venture capital, large and major project funding, and asset-based lending. We can help you navigate through your various options. Call us at (855) 461-1685 to speak with a member of our team.

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