Investing in a new tech company, especially an early-stage one, can be an arduous process, but it’s worth it. After all, startups are some of the hottest companies in the world, and they can bring in millions of dollars. So it’s no wonder that investors are flocking to the market.
Investing in startups
VC firms like Fiat Ventures and Air Liquide Venture Capital are taking on the tech and healthcare startup worlds with a vengeance. In the case of Fiat, the team is out to find the next big fintech startups to invest in. In the case of Air Liquide, they’re backing startups that are tackling the big problems with innovative solutions.
Among the VC firms that are leading the pack are Fiat Ventures, Air Liquide Venture Capital, and Draper Esprit Ventures. The Fiat team consists of a diverse collection of tech and finance gurus with a wide range of backgrounds. For example, they’ve backed several startups in the fintech space, including the best-of-breed banking app Copper, one-click checkout company Sleek, and insurance company Breeze.
The Fiat team has also been spotted investing in startups in some of the most promising spaces in tech, from AI to data science to web 2.5. One of the more notable VC investments has been with fintech pioneers like Kyle Daley of Chime and Jonathan Abelmann of Bestow. A recent round of funding in the fintech space saw the likes of Permit Ventures, Full Spectrum Capital, Invesco Private Capital, and Mulberry’s Chinedu Eleanya.
Fiat’s partners have sunk their hats into more than a hundred companies. Their relationships span more than a dozen industry verticals, including fintech, health tech, and AI.
Funding for early-stage companies
Having the right seed funding in place is a major milestone in any startup’s career. The money raised helps the company’s founders find the product-market fit that is required to create a successful business. It is often used to test and develop the business’s product, and it is also employed to employ the founding team.
The seed stage is also the first step toward reaching the next funding milestone, the Series A. This funding stage involves the sale of preferred stock, or “MVP.” A company that receives a series A funding round gives away 35% of its equity. Most companies at this stage have valuations between $1-6 million.
Companies at the Series A stage are also considered to have proven to investors that they are ready for a larger-scale round. The money raised in this round is used to continue developing the company’s successful product and to expand into new markets. The money raised in this round can also be used to buy another company, which is a common way to scale a business.
A number of venture capital firms are starting to specialize in later-stage investing. They are often led by the same characters that were involved in earlier rounds, and they have the opportunity to invest millions of dollars in their portfolio companies.
VCs have been experimenting with financing a number of different types of startups. The last few years has seen a VC financing frenzy, but it has also seen some experimentation with the type of startups. For example, one Berlin-based VC firm launched a specific crypto fund in February.