CA Final · Advanced Financial Management · Startup Finance
A Bengaluru-based agritech venture, KrishiLink, has built a working prototype and has 200 farmers testing it free of charge. It has no revenue and needs money to hire engineers and carry out a limited market launch. Which stage of startup funding does this requirement most closely describe?
The need is seed stage funding. The venture has only a prototype and no revenue, and it needs money to validate the product and make an initial launch. Pre-IPO, bridge and late-stage rounds are meant for firms with established operations and revenue, so they do not fit.
- ASeed stage funding to validate the product and reach early market entryCorrect
- BPre-IPO funding to prepare for listing on a stock exchange
- CBridge financing ahead of a planned merger
- DLate-stage growth funding for international expansion
Explanation
A venture with a prototype, no revenue, and a need to validate the product and make an initial launch is at the seed or early stage. Pre-IPO and late-stage rounds suit firms with established revenue and scale. Bridge financing is a short-term gap measure, which is not the need described here.
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