TECH BASICS
Venture Capital & Funding Rounds
How startups raise money before they're profitable, in stages like Seed and Series A.
The simple version
Most startups spend money before they make much back, so they raise funding from investors (venture capitalists, or VCs) in exchange for a piece of ownership in the company (equity). This usually happens in stages, each one larger than the last, as the company grows and proves itself.
For example
You might hear a startup announce it "raised a $5M seed round." That's an early stage of funding, often used to build a first product and hire an initial team. Later rounds have names like Series A, B, and C, and typically come with larger amounts as the company grows.
Go deeper
Each funding round usually values the company at a certain amount (its "valuation"), and investors get a percentage of ownership matching what they put in. This is why startup employees are often given equity too — if the company grows in value, that ownership can become worth real money.
Why it matters
Funding shapes almost everything about a startup's life — how fast it can hire, how much pressure it's under to grow quickly, and sometimes even how long it can survive. If you're considering working at a startup, its funding stage is a genuinely useful thing to understand.