Seed, Series A, B, and C: what each round is actually for
What each stage of financing is meant to buy, the evidence investors expect at each one, and what happens when a company raises out of order.
9 min readUpdated
The mechanics inside Garage to IPO are simplified versions of how startup finance actually works. These 24 guides explain the real concepts behind the numbers on your dashboard — what a valuation multiple is pricing, why runway is measured in months, what an option pool quietly costs you, what a liquidation preference does to a modest exit, and what changes the morning after the bell.
Every guide is written in-house, uses worked numeric examples, and states clearly where the simulator simplifies reality. Looking for a single term instead? Start with the glossary of startup finance terms.
How rounds are structured, how investors decide, and what the paperwork actually commits you to.
What each stage of financing is meant to buy, the evidence investors expect at each one, and what happens when a company raises out of order.
The fund maths behind every investment decision, and why a good business can be a rational pass.
Liquidation preference, anti-dilution, pro rata, board composition and the clauses that quietly decide who gets paid.
How uncapped, capped and post-money instruments convert, and why stacked SAFEs surprise founders at the priced round.
What actually happens when a company raises at a lower valuation, how anti-dilution bites, and when a recap is the only option left.
Bankers, the S-1, the roadshow, pricing night and the first-day pop — what each stage involves and what the whole thing costs.
Strategic versus financial buyers, how a price gets set, and why the headline number is rarely what the founders receive.
The numbers that decide whether a company survives: valuation, burn, unit economics and the statements themselves.
Why two companies with identical revenue can be worth $40M and $400M, and what a revenue multiple is really pricing.
How to calculate net burn, why runway is measured in months, and the point at which a fundraise stops being optional.
What it costs to acquire a customer, what that customer is worth, and why the payback period matters more than the ratio.
A line-by-line walk through the three statements, and the specific places where startup accounting differs from what founders assume.
Driver-based forecasting, the three statements, and the handful of assumptions that actually decide the output.
The highest-leverage lever most startups never pull, how to structure tiers, and when to raise prices.
Who owns the company, who decides what happens to it, and how both change with every round.
Why the percentage matters less than the value of the slice, and how four normal rounds take a founder from 100% to under 20%.
What every column in a capitalisation table means, how the fully diluted view differs, and how to build one that survives diligence.
How option grants work from grant to exercise, what a strike price is, and the exercise deadline that costs departing employees their equity.
How board composition evolves round by round, what protective provisions actually block, and how founders lose control while still owning the most shares.
Taking money off the table before an exit: when investors allow it, how much is acceptable, and what it signals.
The monthly report that keeps a board useful, how to handle bad news, and why reporting discipline changes your next round.
Running the business — the funding path it can support, the failure modes to watch, and what changes once it is public.
The failure modes that actually kill companies, in the order they occur, and the early signals each one gives off.
The two funding paths demand different businesses, not just different attitudes. How to tell which one yours can actually sustain.
Quarterly reporting, guidance, lock-ups and an owner base that changes every day. The IPO is a financing event, not a finish line.
Retention curves, the leading indicators, and the difference between a product people like and one they need.
What each early hire actually changes, the order that works, and the roles founders consistently hire too soon.