First, let’s figure out why we are talking about startup funding as something you need to do. This is not a given. The opposite of funding is “bootstrapping,” the process of funding a startup through your own savings.
Every time you get funding, you give up a piece of your company. The more startup funding you get, the more company you give up. That ‘piece of company’ is ‘equity.’ Everyone you give it to becomes a co-owner of your company - just have a look at this nice graph.
What is a venture capital?
Why is everybody raving about this venture capital thing? Just listen to Erik Torenberg!
Your first VC round is your series A. Now you can go on to have series B,C – at some point either of the three things will happen to you. Either you will run out of funding and no one will want to invest, so you die. Or, you get enough funding to build something a bigger company wants to buy, and they acquire you. Or, you do so well that, after many rounds of startup funding, you decide to go public.