WEBVTT

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New businesses acquire
Series A financing

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from external investors
after receiving seed capital.

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Startups usually go through
a series of financing steps

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that begin with
taking seed capital,

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or the initial capital
used to begin the business.

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Often, that seed capital comes
from the business founder's

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personal assets, or
from friends or family.

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Next comes Series
A financing, which

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is the first time a
company offers ownership

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to outside investors.

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For example, Barbara the baker
is starting her own business,

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BA donuts, which will
feature multiple locations

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in different United
States markets,

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and deliver to customers what
Barbara bills as the best

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donuts ever.

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For seed capital, she
empties her savings

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and accepts a loan
from her parents.

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She has opened the first
two shops, but has yet

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to generate much revenue.

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To help BA donuts take
its next steps Barbara,

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accepts Series A
financing in the form

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of an investment from
a venture capitalist

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that loves the donuts, in
exchange for a preferred

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stock in the business.

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Barbara uses the Series A
financing to hire more staff.

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She also conducts research
in out-of-state markets.

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And she experiments with
production techniques

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to perfect her donuts.

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As BA donuts grows and
starts earning profits,

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it undergoes Series
B and Series C

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financing to help the
business continue to prosper.

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