investment, venture-capitalI know very little about venture capital, so assume you have the following two companies who have raised the following:
Company X:
Series A: $2 million
Series B: $10 million
Company Z:
Angel: $500k
Venture: $3 million
Series A: $5 million
Can anything be said about the financial trajectory of either of these companies relative to one another, given that Company Z raised a higher series A, and has yet to raise a Series B?
Is it more likely that Company Z will raise a higher series B than company X? Or are these numbers meaningless on their own?
The numbers are definitely meaningless on their own.
There are two important metrics missing:
Time - We know nothing about the intervals between rounds. Timing is everything.
Stake - This is probably most important - what ratio has been given up? Do investors already own 90% of the company? E.g. how many shares have been sold and how big is the pool? Maybe Company X doesn’t have any shares left to sell without diluting 1% and they can’t reasonably raise anymore investment given their projected capitalization.
Also, a side note, but usually Venture Capital firm is classified as a series investment. In how you stated it, I read “venture” as the “who” and not the “what.” This is also true with “angel” (another ‘who’).
On these metrics alone, nothing can be said of the trajectory. Don’t really think this can be debated.
The numbers are mostly meaningless on their own. Imagine if X got to series B in 5 years while Z got to series A in two.
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