After having considered the early stages of the funding cyclethis article explains more about the different funding rounds during the middle and late stages of a firm’s development.

A is for Achieving traction

The series A round typically comes into play once an MVP (minimum viable product) is created, demonstrated to have value, and achieves traction in a given market. Iteration begins and the product or service can become more polished over time. For example, quick and simple versions of mobile applications are routinely created and placed into the market in a relatively raw form. Following feedback from customers, changes can be made as appropriate to improve sales potential and the product.
In the space industry, this process may take on other forms. For example, an innovative cubesat design may require developing advanced instrumentation for the prototype that the company might be unable to develop due to the high costs of materials, expert staff, or underlying components.

The series A round is also generally thought to be useful in expanding and optimizing the user base. In terms of space, this may be different since a model may be based on selling the product or service directly to another company or may simply not yet be ready to address customers. Attempts could be made to mock up interfaces for testing the delivery mechanism of a satellite’s data in an attempt to acquire a demonstrative user base, which helps prove that the service is being developed in the correct direction.
The iterative testing and confirming approach should be maintained throughout the entire early and mid-stage of a company’s life.

As an example OneWeb closed a Series A round in 2015 for 500M$ (more info here). It then went on to get a 1.2$Bn investment round in 2016 (more info here). 

B is for Building your business

The Series B funding round is often referred to as “B is for Build”. While throughout the previous stages of a startup’s growth, an entrepreneur could have relied on a team consisting of a limited number of well-rounded people, now is the time to acquire funds to hire more skilled, and possibly more experienced, talent.
Depending on the type of business model, the entrepreneur may wish to expand their team to include roles that were previously unnecessary. For example, they may now want sales, tech support, and advertising departments. Upon successfully closing this round, the company should be able to begin expanding its market reach and growing the business.

In the aerospace world series B can be used to pass from a working prototype to a finished product ready for testing on the market.

In April 2016 World View secured 15M$ in series B funding for a new version of thier stratoshperic balloon (more info here), after having previously raised 7.1M$ in series A.

C is for Crrrrazy growth

For a space startup, scaling may be a different story than simply rolling out a mobile app to new countries. The Series C round is generally perceived as the stage when the entrepreneur and their team place most efforts into maximum growth. If an entrepreneur gets to this stage, they are among the elite now challenging existing solutions within their segment, or simply proving to the world that their innovative solution has value. 

At this stage, the entrepreneur could consider acquiring a smaller company which owns a proprietary technology or an experienced team. The company generally begins reducing its risk at this time. For this reason, this financing round may be quantitatively quite large, since investors are more comfortable injecting the operation with larger sums of capital if their confidence grows in the entrepreneur.

In 2017 Anokiwave, a company developing Integrated Circuits (ICs) for satcom and 5G antennas, raised an undisclosed amount in series C financing. According to the CEO “This latest funding round allows us to accelerate the introduction of our second generation of ICs, to develop the third generation of ICs and to grow our teams worldwide to continue our leadership position in the market.”

D is for…Done yet?

If a company gets to this stage and requires further investment beyond series C, it may mean that the company has a solid foundation and simply requires additional support to speed up expansion. Applying for series D funding may also signal to investors that the entrepreneur was not able to accomplish all the expectations set during the series C round and that they have not yet managed to create a reliable source of revenue.


However, Worry not, dear astropreneur! For a space company, sales cycles may differ and the technology development process may be significantly longer than for standard products and services. Quantities of investment may also vary from industry to industry. Rocket Lab famously raised 75M$ in series D funding (more info here) in March of 2017 for scaling up of production, giving it a valuation above 1 Billion and making it a so-called “unicorn”.

R is for Retirement

There are two ways for a company to pay back their financial backers: Exit through acquisition by an external company or Initial Public Offering.

Going public or expanding are sometimes the final stages of an entrepreneur’s involvement in their firm. The mezzanine round is generally thought to be a stepping stone to that process. This round is designed to help the company pay off its venture capitalist (VC) investors and prepare for an initial public offering (IPO) on a stock exchange, an acquisition of another company, or a merger.


Throughout the round, owners may need to give away considerable amounts of equity in preparation for an IPO, in return for massive funding allowing their operation to become globally available. An IPO may help finance a company with public money. Up until this moment, a company was considered private since only a limited quantity of shareholders were in possession of the firm’s equity. These may include the founder, the founder’s family and friends, employees, and professional investors. Once a company goes public, theoretically anyone may choose to acquire at least a part of the company’s shares simply by issuing an order through their brokerage account.

On average, it takes a company nine or ten years to reach the point at which they can comfortably go through with an IPO. At this stage, the company will be held publicly accountable for its actions and decisions. Regular financial reports will be issued to inform the world about its current state to ensure complete transparency. In addition, regulatory bodies, such as the Securities and Exchange Commission (SECin the United States, will keep track of the financial and accounting information and will ensure the laws are followed.

For the entrepreneur and the investors, going public means liquidity, which is the ability to purchase or sell an asset quickly and easily at a price close to fair market value (according to the CFA Institute, 2017). It means that shareholders can easily trade shares for money and make an exit. This can be a total or partial maneuver in which all the years of hard work and all the risk investors took on are being rewarded financially. The employees, which may have been granted incentive packages in the form of company equity, will also have the opportunity to cash out, since a lot of good talent requires additional incentives beyond a decent salary to decide to work for a risky endeavor. The entrepreneur may decide to continue to grow the business or exit. If they choose to do the latter, they may do so to ensure maintaining some degree of control over the company even though it has already gone public.

According to the Bryce Group there are more than 140 angel investor-backed and venture capital-backed space companies which were founded and funded after the year 2000.

To visualize the various fundraising rounds, we have come up with a chart (below) which depicts a startup fundraising cycle and the important components as the company develops over time, which may vary considerably between industries and market segments.


Posted by Kacper Grzesiak and Paola Belingheri