How Funding Rounds Work For Startups

The promise of big, easy and fast money to build business ideas has inspired countless entrepreneurs to throw their hats in the ring to try and get their share, and make their visions a reality.For some the game of raising capital to build businesses and achieve buzzworthy exits has become a business of its own. Of course, in reality it is a little more complex and demanding than that. So, how do funding rounds work? Startups don’t just raise a lump sum of cash or get a startup business loan and then be set up for life. In fact, the number of times startups are going back to the market to raise more capital has been growing. Each of these raises is known as a ‘funding round’. Each round is designed to give entrepreneurs and their business babies enough capital to get to the next milestone or stage. This ‘runway’ between rounds can be as short as 12 months but some entrepreneurs push it to 6 months.