Venture Round - Round Names

Round Names

Venture capital financing rounds typically have names relating to the class of stock being sold:

• Seed round where company insiders provide start-up capital
• Angel round where early outside investors buy common stock
• Series A, Series B, Series C, etc. Generally, the progression and price of stock at these rounds is an indication that a company is progressing as expected. Investors become concerned when a company has raised too much money in too many rounds, considering it a sign of delayed progress.
• Series A', B', and so on. Indicate small follow-on rounds that are integrated into the preceding round, generally on the same terms, to raise additional funds.
• Series AA, BB, etc. Once used to denote a new start after a crunchdown or down round, i.e. the company failed to meet its growth objectives and is essentially starting again under the umbrella of a new group of funders. Increasingly, however, Series AA Preferred Stock investment rounds are becoming used more widely along with convertible note financings or other “lightweight" preferred stock financings, such as “Series Seed” or “Series AA” preferred stock, to support less capital-intensive business growth, as their simplicity and generally lower legal costs can be attractive to early investors and founders (see http://ycombinator.com/seriesaa.html ).”
• Mezzanine finance rounds, bridge loans, and other debt instruments used to support a company between venture rounds or before its initial public offering