Series C funding is a company’s third injection, and typically the last one, of investment capital from outside sources. It follows Series A and B. It generally occurs to make the startup appealing for acquisition or to support a public offering. Therefore, Businesses that make it to Series C funding sessions are already quite successful. Strictly speaking, these businesses are no longer startups. They generally are successful companies in their late stages of development, with solid revenues and profits. They look for additional funding in order to help them develop new products, expand into new markets, or even to acquire other companies.
Similar to previous stages of financing, the series C round primarily relies on raising capital through the sale of preferred shares. The shares are likely to be convertible shares. They offer holders the right to exchange them for common stock in the company at some date in the future.
With each round of investment, the original business owners give up more of the company, further diluting their own position and power. Because the company will presumably be more valuable with each round of financing, outside investors will likely pay more, and get a smaller slice of the business in return, compared with previous investors in earlier rounds. Many investors from previous financing rounds could participate in the series C financing round as well. The players can opt to inject additional capital in the company or attract new investors. In Series C investors are generally encouraged about its long-term odds of success.« Back to Glossary Index