Read the pages in the Entrepreneur June 2017 edition and answer the below questi
ID: 364205 • Letter: R
Question
Read the pages in the Entrepreneur June 2017 edition and answer the below questions. (Tasks 1-6). This is a story of a start- up. You can research on other similar companies to enhance your answer.
Questio: Discuss the various costs associated with the sources of financesuggested for the expansion needs above. Provide examples and explanations. (minimum one page)
DOUBLING grow, they've witnessed the growth since their original Series A funding, and they strongly believe in our plans for the future." “It's a great tors want to see this as well," Chehab adds. "It would be a pretty bad sign if your exist- ing investors stopped taking part in rounds, so it's impor- tant for us to get these guys to come back in. It gives the right signals to new, incoming investors." JON RICHARDS AND AMREHAB COMPAREIT4ME.COM FOUNDERS MAKEEVERY (INVESTMENT) ROUNDCOUNT And compareit4me certainly would like to see new names in its list of ivestors- the company is, after all, looking to close a Series B round of indication, then compare- expected to be more than Entrepreneur Middle East t4me's rivals should indeed double that of 2016. Another $10 million in the coming filmed compareit4me.com co-founders Jon Richards themselves against it- after cnt state is how its back to some really interesting and Samer Chehab for an all, since its launch in 20ers keep returning to support nvestors-guys who can episode of #EntMETalks, this enterprising startup a video series that we think twice before pitting good sign of compareit4me's months. "We're speaking the venture- its latest funding round sees the participation of existing investors STC Ven- few rounds if we need it," write really big checks, who can support us for the next has been able to raise a total which is, by itself, a testatures, Wamda Capital, Dubai Chehab reveals. "Not only ment to how well this online Silicon Oasis Authority and this, but they will also be able we asked the duo if they comparison site is doing. Its Saned Partners, and the sig to support us with guidance had a message for theirnumbers are impressive: CFO nificance of this act isn't lost and contacts." But getting competitors in the market, Jonathan Rawling tells me o Chehab and Richards. "We funds in this round hasn't don't take this for granted; that compareit4me has seen organic traftic rise by over e feel incredibly lucky that 400% since January 2015, these guys are ready to sup- and since its Series A round in September 2015, its annu been smooth sailing, the co- founders note. It's not easy Chehab says, "I think we're and Richards replied: "Haram what I'd say!" He said this port us on an ongoing basis," lucky that we've shown great Richards says. "But this is not growth. We've shown that we in late May about raising arevenues have more than qua a charity. They're supporting have a good understanding of the insurance market, and»» announcemen total of US$3.5 million is any drupled, with 2017's revenue us because they've seen usExplanation / Answer
In the attached article, the business raised capital and financed themselves through Series A & Series B funding.
There are various costs and financial transactions associated with these series of funding.
Series A funding happens when the owners of the start-up expose themselves for selling equity or stake in the company at a certain valuation decided between the owners and investors. The amount typically raised in this level of funding is around $2 - $3 M dollars. The owners offer a stake in the company and might be a management position to the investor for their investment in the firm. Reputed firms that participate in Series A funding include Greylock, Sequoia, Benchmark, Accel, and so on.
Series B funding starts after Series A when the owners have established the proof of concept and now they want to take the company to the next level. The valuations at this stage might be higher than that of during Stage A as this stage relatively offers less risk than the earlier stage. In this round as well, owners and existing investors offer equity or management control for the amount invested by the investor. Series B funding can be done by established institutions as well such as investment banks, private equity firms, etc.
Therefore, for any round of financing or capital infusion, the investors get a portion of the business in turn for providing capital or financing.
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