How exactly do new businesses or startup companies raise millions of dollars from investors in things like Series A-D funding rounds? What is the process to even be eligible for this?

Question

I follow some business/entrepreneur publications and I’m ALWAYS reading about some new startup or business that just gained millions of dollars in funding through various investing rounds or similar. It makes entrepreneurship seem like a cakewalk but in reality I have no idea how you would even start this process as an entrepreneur or business owner. Would love to learn how this works!

In: Other

Answer 1

Venture capitalists like your idea, to see it to fruition you might need $100,00,000, but they don’t want to risk $100,000,000. They give you $1,000,00 at first then agree to give you the rest in installments as long as you reach certain benchmarks. e.g. by the first quarter, you must have 50,000 subscriptions and wi’ll give you $9,000,000 more, and at the end of the year you must expand to 3 states, by the second quarter of next year you must have 1,000,000 active users and so on.

Investors don’t want to risk all their money so you get paid in installments after you reach certain benchmarks that are pre-negotiated when they agree to fund your idea.