Series A,B,C,D are Financing Stages for a startup, here is what it means:
Usually Series D goes in the fifth round of investments. While it starts from a seed stage investment, and then series A through C.
Series A round of financing is the first round of financing that a startup receives from a venture capital firm i.e. the first time when company ownership is offered to external investors. This is generally done by allotting preferred stock.
At this stage, the product/ service is already being sold in the market. Series B round of funding is required by the company to scale up, to face competitors and have a market share. Goal of this round of funding is not only to break even but to also have net profit. At this stage, investment risk is lower and amount of funding is more than Series A round of funding.
A venture capital firm goes for this round of funding when the company has proved its mettle and is a success in the market. The company goes for Series C round of funding when it looks for greater market share, acquisitions, or to develop more products and services. Series C round of funding can also take place to prepare the company for an acquisition. It is the last stage in company’s growth cycle before an Initial Public offer (IPO). Valuation of company at this juncture is done on the basis of hard data points. This round of funding is more of an exit strategy of the venture capital firm.