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Stage of Development
The type of and source for private equity capital that your company should seek depends in part upon its stage of development. A company's stage of development is very subjective and is determined by a multitude of factors, including the number of employees, the amount of revenues or profit, the status of product development, and/or the capitalization. Private equity investors will use all of these factors, and perhaps others, to arrive at their own determination of your company's stage.
|National Venture Capital Association Highlights and Resources|
The National Venture Capital Association, a valued Springboard partner uses the following criteria to define a company's stage.
- Seed/Start-Up Stage: The initial stage. The company has a concept or product under development, but is probably not fully operational. Usually in existence less than 18 months.
- Early Stage: The company has a product or service in testing or pilot production. In some cases, the product may be commercially available. May or may not be generating revenues. Usually in business less than three years.
- Expansion Stage: Product or service is in production and commercially available. The company demonstrates significant revenue growth, but may or may not be showing a profit. Usually in business more than three years.
- Later Stage: Product or service is widely available. Company is generating on-going revenue; probably positive cash flow. More likely to be, but not necessarily profitable. May include spin-outs of operating divisions of existing private companies and established private companies.
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