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Early-stage investing

Early-stage investing funds the first three stages of a company’s development. It is divided into three distinct funding types:

  • Seed funding (seed capital)—money provided to help an entrepreneur start a business
  • Start-up funding—money used to help a company develop products and start marketing those products
  • Early-growth funding—money to help establish and boost manufacturing and sales

Early-stage investors understand that building a new business takes time and ongoing support, so they typically expect to make multiple investments in a single company as it develops.

Because there is more risk associated with new companies that don’t yet have a foothold in the marketplace, not all investors are inclined to put money into them. When a start-up company matures and becomes a late-stage company it can seek funding from late-stage investors.

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