Single rounds of investment are not that common. Entrepreneurs often raise capital in multiple rounds of financing, so that they can take advantage of higher pre-money valuations at each subsequent round. Valuations may rise over subsequent rounds as companies demonstrate proof-of-concept, grow their customer bases, or otherwise increase their probabilities of success. Unlike stages, each round is priced independently and involves a new term sheet specifying the characteristics of the investment. Investors in early rounds typically invest in subsequent rounds to maintain similar ownership percentages in a company over time.

|Single round of financing|Staging rounds of financing|h
|Increases the risks|Reduces risk|
||Higher pre-money valuations|
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mbi_public
created
Thu, 04 Nov 2010 10:47:54 GMT
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dirkjan
modified
Thu, 04 Nov 2010 10:47:54 GMT
modifier
dirkjan
tags
M10
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creator
dirkjan