Is there a technical distinction between "early stage" funding and other "early" funding terminology


1

Is there a formal distinction between the term "early stage" funding and other "early" funding such as seed funding, angel funding and venture funding?

Funding

asked Nov 27 '09 at 15:26
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Robert
43 points

1 Answer


3

No, none of those types of words or categories are formally defined.

In fact, even just one of those terms can mean many things. Take "angel" for example. I had a guest-post on VentureBeat about how to get angel investing, and from the comments therein you could take away these differences of opinion:

  • "Angel" means "Raise under $50k and bootstrap from there."
  • "Angel" means "Raise under $100k and later possibly raise an A-round."
  • "Angel" means "Raise $300k with an option for another $300k, with the intent to never raise a real VC round."
  • "Angel" means raising money from friends and family.
  • "Angel" means raising money from accredited investors who should also be company advisers.
  • "Angel" means investing in (relatively) lower risk, lower return companies.
  • "Angel" means investing in high-risk, high-return companies.

You can do the same for any of these terms.

Bottom line: Decide what makes sense for you, and go for that. Be able to explain what you want in one sentence, then nomenclature doesn't matter.

answered Nov 28 '09 at 02:18
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Jason
16,231 points
  • Thanks much Jason. I considered a term formally defined if a Wikipedia article exists for it. :) The reason I asked is because I recently spoke with an entrepreneur who made a definite distinction between these terms, so I wanted to investigate. – Robert 9 years ago
  • Yeah, some people get religious about it, but clearly the reality is that it's not well-defined.... – Jason 9 years ago

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