Updated: October 2025
Contributors: Olena Petrosyuk, Partner at Waveup
There are five main stages of startup funding: pre-seed, seed, Series A, B, and C. Pre-seed gets your idea off the ground, seed helps build your MVP, Series A fuels growth, Series B scales the team and traction, and Series C drives expansion into new markets.
Sounds quite linear and simple, right? But in reality, each stage has its own investor expectations, risks, and mindset. And you, as a startup founder who wants to raise capital, must know all the specifics inside out.
It’s easy to get lost in the jargon, when to raise, and how to do it right, especially for a first-time founder. That’s why we’ve created a complete guide on all startup funding stages (from pre-seed to IPO), so you know what investors want, when to raise, and how to move forward strategically.
Let’s dive in!
A quick snapshot of the five startup funding stages
Before we dig deeper into what each round means and how to close it, let’s have a look at a quick comparison of all startup funding stages in 2025:
| Stage | Average /median round size | Average valuation | Runway | Core objectives in 2025 | Who usually writes the cheques |
| Pre-seed | $0.5M – $1M (average) | $5M – $6M | 12–18 mo | Prove MVP with real users & early traction | Family&friends, angels, micro-VCs, accelerators |
| Seed | $2M – $4M (average) | $12M – $15M | 12–24 mo | Show robust PMF & consistent early revenue | Angels, seed-focused VCs |
| Series A | $10M – $12M (average) | $40M | 12–20 mo | Demonstrate scalable GTM fit & repeatable growth engine | VC funds, existing seed investors |
| Series B | $30M (median) | $50M – $105M | 18–24 mo | Expand market share, scale operations, and strengthen unit economics | Growth-stage VCs, strategic investors |
| Series C | $49M (median) | $100M – $250M | ≥ 18–24 mo | Global expansion, acquisitions, path to IPO | Late-stage VCs, PE funds, banks |
Now, let’s zoom in on each stage.
What is pre-seed funding
Pre-seed is the earliest stage of startup financing, used to turn an idea into a working MVP. It often comes from founders themselves, friends, family, angel investors, or sometimes even micro VC funds and covers early product development and market research.
Most startups at this stage only have an idea, a team, and an understanding of their target market — they are essentially pre-revenue.
However, according to our recent study, in 2025, that’s rarely enough. Investors increasingly expect early user validation, traction signals, or even first revenue before they write a check.
This stage has become a distinct, named round in the VC world over the last 8-10 years due to the growing need for substantial initial money infusion for entrepreneurs to get things off the ground.
Startups can use pre-seed money mainly for:
Hiring crucial team members in areas like product development and marketing
Validating the idea through proof of concept
Developing a minimum viable product (MVP) or a prototype
Covering basic operational expenses, including office space, software tools, and administration
Waveup sidenote: Your capital should sustain you long enough to achieve outlined milestones and provide a buffer before the next funding round. It’s crucial to request the right funding amount. Asking for too little could deplete your resources before fulfilling your commitments, jeopardizing future fundraising. Conversely, seeking too much might hinder your ability to raise any funds at all.
Runway: A pre-seed round typically gives you 12–18 months of runway.
Funding instruments:
Qualified equity round (requires company valuation)
SAFEs, in all their variety
What is the average pre-seed funding amount?
Pre-seed startups usually raise between $50,000 and $1M (one of our clients raised $3M pre-seed). Your position in this range depends on factors like your industry, location, business potential, founding team’s expertise, and pitch effectiveness.
Who invests at pre-seed?
Angel investors: Wealthy individuals who often provide initial financial support, with investments ranging from $30,000 to over $500,000.
Accelerators and incubators: These programs not only offer mentorship but sometimes follow-on pre-seed financing for top graduates.
VC funds: Ranging from micro VC funds specializing in early-stage startups to established funds participating in early investing trends.
So, how do you raise pre-seed funding?
As we’ve mentioned, pre-seed investors today expect more than just an idea; they want a strong team and early signs of a product–market fit.
That means showing you’ve validated your concept with real users, gathered feedback, and have the traction or growth signals to prove there’s demand. A credible founder–market fit is still the foundation: your team’s track record, skills, and understanding of the market will heavily influence investor confidence.
On top of that, your pitch should clearly articulate:
The problem you’re solving
Why now is the right moment to solve it
The size of the opportunity
How you plan to win it
A minimum viable product (MVP) already in use
A scalable business model
A realistic go-to-market plan with key milestones
High-level financial projections
Evidence that you can meet the next stage’s expectations
Relevant read:
What is seed funding
Seed funding is the first substantial outside investment that helps your startup move from building to early scaling. It usually follows pre-seed rounds and supports refining the product, validating market demand, and proving your business model.
In 2025, success at the seed stage is measured by early signs of product–market fit: real user adoption, consistent growth, and strong customer retention.
Equity: Seed investors typically get between 15%-35% of equity.
Valuations: Seed valuations are typically between $12M and $15M.
Runway: The runway of a seed round is typically 12-24 months, depending on your burn rate.
What is the average seed funding amount?
In 2025, US seed rounds average $2M – $4M. But let’s also have a look at how the average seed deal size has evolved over the years:
Source: Crunchbase
Who invests at seed?
Angels
Venture capital firms
Sometimes, previous investors who participated in the pre-seed round
How to raise seed funding
At the seed stage, it’s all about early product–market fit. Investors want proof that your product works in the market and is gaining traction.
That means you must show hard evidence: paying customers (or strong conversion from free to paid), repeat usage patterns, and clear proof your solution solves a real, urgent problem. You’ll also need to prove the opportunity is big enough to scale and back it with the data on your TAM, target persona, and validated use cases.
Market validation should go beyond numbers; that is why you should include customer quotes, testimonials, or letters of intent that prove demand. Also, present a clear go-to-market plan where you outline your main acquisition channels, and a revenue forecast with solid, realistic financial projections. Together, these elements will give investors confidence that you can scale and hit the milestones needed for the next round.
Related read: $4M seed round for a prospecting automation platform: Case study
What is Series A funding for startups
Series A funding comes next after seed, typically from VCs or previous investors, to help scale a startup that’s already proven its product–market fit.
The primary goal of Series A funding is to steer a startup toward profitability or, at the very least, to achieve specific revenue targets. These targets can differ greatly, depending on the startup’s industry and business model.
To achieve this, the majority of the raised Series A cash goes into:
Enhancing the core product/service
Fueling sales and marketing funnels
Establishing partnerships
Optimizing operations to achieve capital efficiency
But since benchmarks have shifted, in 2025 VCs expect stronger traction, clear unit economics, and early signs of scalable GTM fit before they’ll commit.
And many investors emphasize the importance of starting the preparation for raising Series A well before you run out of cash.
Leslie Feinzaig, founder of Graham & Walker, advises founders to focus on their critical metrics 12 to 18 months before seeking Series A investment.
Equity: Founders typically give up 20%–25%.
Valuations: Most Series A startups are valued between $10M and $45.5M.
Runway: Funding is expected to last 12–20 months.
What is the average Series A funding amount?
Series A startups typically raise $9M to $25M, with the round size depending on a startup’s traction, market, and growth plan. Here’s the median and average deal size over years:
Source: Crunchbase
Who invests at Series A?
VC firms
Previous investors who refinance their portfolio companies with the biggest potential
How to get Series A funding?
Obviously, the requirements for this stage rely heavily on your business model and industry benchmarks.
But there’s a general set of key milestones startups must hit to qualify for this round and stand a chance:
Strong signals of product-market fit specific to your industry and business model
Steadily growing customer/user base month-over-month (MoM) or quarter-over-quarter (QoQ)
Consistent revenue growth and demonstrable ability to monetize your product
Strong unit economics and capital efficiency
Valuable partnerships
Exit strategy
Related read: How to prove to investors your product-market fit
What is Series B funding
Series B funding is the next major venture capital round that startups raise to scale beyond early growth. At this stage, your company has already proven its business model, built a strong customer base, and is ready to expand into new markets, grow the team, and increase revenue. Series B rounds are typically led by larger venture capital firms, often with the support of previous investors.
Raising Series B funding, in most cases, is a sign that your startup is on its way to becoming a serious market player. It means the company has moved past the risky early stages, especially since roughly 35% of companies fail after Series A, and is now ready to scale fast.
By this point, the startup is more mature, with a strong market presence and operations running at full speed. Series B funding is usually used to:
Dominate the market, fend off the competition, and become a category leader
Expand into new regions or countries
Amp up revenue generation and move closer to/achieve profitability by expanding customer base, adjusting business model, or moving upmarket
Enhance the product to maintain a competitive advantage
Scale operations and expand the team
Equity: Founders give to investors 10%-25% on average.
Valuations: Series B funding valuation lands somewhere between $50M and $105M, with the peak hitting $160M in 2022.
Runway: Series B money lasts for around 18 to 24 months.
What is the average Series B funding amount?
Series B rounds typically raise between $20M and $50M. And the median amount is currently about $30M.
Source: Crunchbase
Who invests at Series B?
Growth-stage VCs
Existing Series A investors
Strategic investors and corporate venture capital arms
How to raise Series B funding
The key Series B milestones, again, vary based on the startup’s industry benchmarks, business model, and market conditions.
But as a rule of thumb, here is what investors expect at this stage:
Strong revenue growth: For SaaS startups, a common target is to have Annual Recurring Revenue (ARR) in the range of $2 million to $10+ million; others must demonstrate consistent year-over-year revenue growth of 100% and gross margins above 50%
Strong customer growth and retention rates, with a healthy CAC to CLV ratio of 1:3 and a low churn rate
Achieving a significant market penetration rate, brand recognition
High sales and marketing efficiency with a good Customer Acquisition Cost (CAC) payback period and Customer Acquisition Efficiency Ratio (CAER)
A mature, feature-rich product (for SaaSs); hitting critical product development milestones and obtaining regulatory approvals or patents (for hardware or medtech)
Expansion into new markets or regions, with provable ability to replicate success
Strong strategic partnerships that open new growth opportunities
Exit strategy
Related read:
What is Series C funding
Series C funding is a later-stage investment round, and the startups planning to raise it typically have already proven strong market traction, solid revenue streams, and scalable operations. At this stage, all the focus is on driving expansion, whether by entering new markets, making acquisitions, or developing new product lines.
Series C rounds are typically led by late-stage VC firms, private equity investors, hedge funds, or corporate investors who are looking for lower-risk, high-growth opportunities. Of course, you can get money from your previous investors, but given the substantial check size, they are more likely to contribute a chunk of the needed cash rather than lead the round.
Equity: Typically, Series C startup equity given to investors lands around 10-15%.
Valuations: The average Series C valuation starts from $100M and can reach up to $250M.
Runway: Ideally, Series C financing should last a company a minimum of 18 to 24 months or longer.
What is the average Series C funding amount?
Series C rounds typically range from $30M to $91M, and the median deal size is now around $49M.
Source: Crunchbase
Who invests at Series C?
Late-stage VC funds
Private equity funds
Hedge funds & crossover investors
Corporate investors & banks
Existing investors who want to protect or expand their stake
How to raise Series C funding
By Series C, fundraising is often easier as your track record speaks for itself, and new investors are more likely to approach you than the other way around.
Still, you need to show strong fundamentals, a clear path to profitability, and the same core strengths that secured your Series B, but here you must back your claims with higher revenue and market dominance.
“Okay, so these are the most common startup funding stages, but is that all? And what typically happens after Series C funding?” you might be wondering.
Not quite – after Series C come later rounds such as Series D, E, and beyond, often leading up to an IPO. Let’s have a look at them as well.
Later funding stages: Series D, E, F & G funding
Later funding stages (Series D, E, F, & G) are extra investment rounds for startups that have already firmly established themselves, own a serious % of their addressable market, and generate substantial revenue but aren’t yet ready for an IPO.
With some exceptions, raising extra cash later on often signals the company’s inability to turn profits and successfully exit. This begs the question: Is going for Series D funding bad? The short answer is no.
Needing Series D investment and further rounds doesn’t mean you’re in trouble. The scenario will depend on a specific company, its business model, long-term strategy, and market conditions.
Let’s walk through a comparative table to see what later stage rounds (Series D, E, F & G) actually entail:
Initial Public Offering (IPO): Funding from public markets
An Initial Public Offering (IPO), often called “going public,” is when a private company issues its shares in the public market for people to buy at a price that reflects its current value.
Going public is viewed as the ultimate sign of success for a startup and its backers, who get to cash out. However, there are cases when companies choose not to go down the IPO route to maintain control or simply sell the company. Either way, just having the option to go public means a company has reached the pinnacle of success.
Wrap-up: Fundraising doesn’t have to be a struggle
Even though 2025 is tougher than ever.
Investors are ultra-cautious, benchmarks have jumped one full stage, AI has crowded every market, and raise cycles drag longer. This all results in lower VC reply rates.
However, this doesn’t mean you’re doomed.
At Waveup, we helped our clients raise 610M+ in 2024. We work closely with VC and PE funds, so we know exactly what they expect to see and how to make them eager to dip their hands in new stakes.
Whether you’re raising early-stage or late-stage, we can help you prepare an investor-grade pitch deck and other fundraising materials that get you in the room and closer to “yes.”
Contact us and let’s discuss the details.
FAQ
How many rounds of funding before the IPO are there?
Typically, startups go through several funding rounds before an IPO – Pre-Seed, Seed, Series A, B, C, and sometimes D or E. But the exact number depends on the startup’s growth rate, business model, industry, and capital needs.
Lead investor vs. follow investor: What’s the difference?
A lead investor typically spearheads a funding round, sets the terms, and invests a significant portion of the capital. Follow investors to join the round under these terms and write smaller checks.
How much do founders make in an acquisition?
Founders’ earnings from an acquisition depend on their equity share and the acquisition price. This price is widely, influenced by the company’s valuation, negotiated terms, and previous equity dilution from funding rounds.
How much equity to give away in a seed round?
In a seed round, founders typically give away 10-30% of their equity, with the exact number depending on the startup’s valuation, check size, market conditions, and negotiation dynamics.
How long does Series B funding last?
Series B funding must normally last 18-24 months, depending on the startup’s burn rate.
How to value a startup for seed funding?
Valuing an early-stage startup involves assessing the team’s quality, market size, product potential, and early traction. Financial metrics don’t matter as much, as the focus is on future growth potential and qualitative factors.
What’s the difference between pre-seed vs. seed funding?
Pre-seed is the earliest and the smallest funding round that helps founders take their very first steps: assemble the team, validate the demand, and potentially create an MVP or prototype. Seed funding is the next, larger funding stage, where you develop a proper product, search for product-market fit, and validate your business model.
What’s the difference between Series A vs. Series B?
Series A funding is where you start to solidify your startup’s market presence. You’ve got some sales, and it’s time to optimize your product and grow your customer base. Series B takes it up a notch – you’ve made your mark in the market, and now you’re looking to expand aggressively. This could mean scaling operations, exploring new markets, or increasing market share. The investments and valuations in Series B are higher, reflecting greater growth ambitions.
What’s the difference between Series C vs. Series D?
Series C funding is for established companies aiming to diversify or scale aggressively – launching new products, and entering new markets or geographies. Series D is more of a strategic round, typically pursued by companies nearing an IPO, planning to acquire other companies, and overcoming particular hurdles before going public.
What’s the role of angel investors in the early stages of startup funding?
Angel investors are typically one of the first to back a startup at its early stage by pouring their own money and bringing mentorship, industry connections, and credibility. So, they actually help founders validate their idea, build early traction, and get positioned for venture capital down the road.