Later stage funding is normally for a company expecting to go public usually within a year. Often this funding is structured so that it can be repaid from proceeds of the public offering and non-included in any IPO sale restrictions.
Later stage funding investments are for companies with:
- More than $25 million in gross revenue potential.
- Large National or International market potential.
- Management teams with successful track records.
Second, third and mezzanine financings are all considered later-stage and funded by venture capital investors and/or, in the case of mezzanine financing, can also include corporations or strategic investors.
As in first-round financings, valuation is a function of the company’s development to date relative to similar companies in the industry and relative to the last round of financing.
