Stage 3

Stage 3

How much do you need?

Depends on the stage of the company.

Stage of Evolution

Seed Stage – Formulate the idea. (R) revenue minus

· Still on the drawing board

· Market feasibility studies are conducted and examined.

· Mostly self or friends and family financed. Also research grants to University researchers accomplish this.

Start-up Stage – Start forming the company. (R) revenue minus

· R&D being perfected away from the University to avoid them claiming ownership

· Market acceptance and desire has already been discerned. Customer has a need that your product fixes

· Develop management team

· Complete final market studies

· Estimate financial needs to bring product to market

First Stage – Development of product to get into the market. (D) revenue minus

· Alpha and Beta testing

· Sales capabilities put in place

· Marketing capabilities put into place

· Customer / Product support and service put into place

Second Stage – Development of product and market continuing. (D) revenue minus

· Close to breakeven point

· Expanding company capabilities to allow for adequate market support

Third Stage – Company, sales and profits are growing rapidly. Revenue generating

· Product has a foothold in the market

· Time for intense sales and marketing efforts.

· Perfecting the product manufacture

Fourth Stage – (Bridge financing) . Revenue generating

· Preparing for an IPO (Initial Public Offering)

· Bridge Money will be repaid out of proceeds of the stock offering

· Transition from a small company to a middle sized company

· Subsequent public offers of stock will be made in order to fund continued expansion and growth

Acquisition Funding – Resource made available to allow the company to expand by purchasing other firms resulting in:

· Mergers

· Consolidations

Leverage Buyout – Financing technique that can be used when the existing net assets of a company exceed the selling price.

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