Late Startup Phase

~Series C (fourth round) financing ~

This information is provided for general informational purposes only and should not be relied upon as legal interpretations by the Office, shall not supersede any part of the Florida Statutes or Florida Administrative Code, and does not constitute legal or financial advice. The Office does not endorse any third-party or guarantee the accuracy of any third-party information linked to or referenced herein.

In the late startup phase, a company is experiencing sustained success, revenue growth, and continued demand. Companies in this phase may look to expand operations, develop new products, and enter new regions or markets. 

Financing in the launch phase is typically called Series C financing. Series C funds are often used for operational and expansion costs. 

Business Revenue

Also know as ‘retained earnings’, companies can invest their revenue back into the company for future development and expansion. Before using business revenue for this purpose, consider the following:

  • Are the business operations and infrastructure established?
  • Does the company have sufficient cash flow?
  • Is the company profitable?
  • Does the company have any outstanding debt?
  • Does the company anticipate additional or immediate expenditures?


Research and Business Grants 

Various grant funding opportunities are available from state and federal governments and some private organizations. Most grants are directed towards non-profit organizations, and organizations conducting research and making innovation efforts. Before applying for a grant, consider the following: 

  • Do you understand the terms and requirements of the grant? 
  • How must the grant funds be utilized?
  • Do you have the additional time and effort for the application and reporting requirements?
  • Does the grant align with your business plan?

Traditional Business Loans

Financial institutions and online and private lenders offer business loans to qualified applicants, typically those who have been operational for several years and can demonstrate a revenue history. Before applying for a business loan, consider the following:

  • Can the company afford to take on debt?
  • Can the company afford to repay the debt in the specified timeframe?
  • Do the company’s financial statements show the potential for sustained profitability?
  • How will defaulting on a loan affect the company?

Angel Investors 

Angel investors are high net-worth individuals who invest early in business endeavors in which there is a high-potential for success. Angel investors typically want to see financial statements showing revenue flow and the potential for future profits. Before seeking capital from angel investors, consider the following:

  • Is investment financing appropriate for the company's long-term growth plan?
  • Can you afford to provide investors with offering updates and financial reports?
  • Are you able to facilitate shareholder meetings and handle investor input into company operations? 
  •  Are the company owners and board of directors willing to surrender equity in the company? 
  • Has the company considered the future implications of surrendering equity in the company? 
  • Is the company prepared to comply with securities regulation and reporting/disclosure requirements?
  • Can the company afford the legal cost of raising investment capital?
  • Does the company’s performance or initial market research reflect revenue flow and the potential for future profits? 
  • How will the company provide liquidity to investors? 
  • Does the company have a viable exit strategy?


Venture Capital

Venture Capital is a source of investment financing from private firms, funds, or individual investors. Before seeking venture capital, consider the following:

  • Are you willing to give up some equity in your company to investors?
  • Is investment financing appropriate for the company's long-term growth plan?
  • Does the company have a viable exit strategy?
  • Are you willing to invite investors into a mentor partnership role with the business?
  • Can the company afford to manage investor expectations?
  • Have you considered the implications of equity dilution in your company?
  • Is the company prepared to comply with securities regulation requirements?
  • Can the company afford the legal costs associated with raising investment capital?
Other Considerations

Other considerations when deciding on financing in the Late-startup phase:

  • Startup companies can have high financial risk to lenders and investors. 
  • A company typically needs the most financing during its initial startup and growth phases. 
  • Expanding business operations may require significant capital.
  • Institutional lenders and investors typically want to see financial statements that show revenue flow and the potential for future profit.
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