Image Source-

This article is written by Madhav Gawri, pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from Here he discusses “Working of Series B and Series C Funding”.


Entrepreneurs are never short of ideas, whether they belong to this generation or the previous one. From the beginning to humankind, there has been an inevitable development in the field of business, industry, and profession, and our generation is going to do the same. The entrepreneurs of the previous generation used to conduct business in a particular way and the next generation is going to conduct their business in another way. Similarly, the previous generation used to raise funds by taking support from their loved ones, friends, or they used to pool in from their kitty. After the humble beginnings, the business had to prove its worthiness in the market while steadily growing its reach, operations, and customer base. If they did everything right and made it far, then for future expansion, the last stage for them was an Initial Public Offer (IPO). 

For our generation, the genre of the movies remains the same, humble beginnings and making it big, but the script is different. In today’s day and age, an entrepreneur raises finance from friends and family in the initial stages which can be categorized as pre-seed funding. A business goes through a series of funding depending upon the need. There can be another funding for expansion in the manufacturing unit and there can be another round of funding for marketing purposes and international expansions. Further, an entrepreneur raises capital for his business, by not asking around his or her loved ones but by going through stages of funding rounds. These rounds are:

  1. Pre-Seed Funding
  2. Seed Funding
  3. Series-A Funding
  4. Series-B Funding
  5. Series-C Funding

In this article, we are going to discuss and focus on Series B and Series C funding.
            Click Above

Series-B Funding

It is believed that seed is raised on vision, Series-A is raised on hope, and Series B is raised on pure facts and figures.

This is the fourth round of funding a business or any form of funding a body-corporate receives. The starts-ups are not generally referred to as ‘Start-ups’ in this stage, rather they are referred to as businesses or companies. These businesses majorly look for V.C. levels of participation.

Series-A and B shares common characteristics, but the difference is that Series-B funding adds another category of the investor, which tends to invest at later stages, whereas Series-A investors are key anchor investors, which helps to draw in other investors.[i]

Most of the series B companies and businesses are valued at around $30 million and $60 million. The amount of funding depends on factors like the type of industry, demography, geography, etc..

An example of Series-B funding would be by the name of ‘Mamaearth,’ based in India which received series B funding from ‘Sequoia Capital India’ of an amount of approximately 1.8 million U.S. dollars. Therefore, the amount can start from a million U.S. dollars and can go up to billions of dollars. In U.K. series B round can range around $7m and $20m.[ii]

State of the Business during Series-B Funding

When a company looks for Series B funding, then the company must be in a mature stage of its business cycle. It is analyzed that the company or the business has been established as one of the key players in the market which it curtails to. Moreover, it also indicates that the business is past its development stage and wants to stride to the next level. Before the series B funding, the company’s purpose is to launch itself and its product(s) in the market and establish a considerable demand for it. At the time of the series B funding round, the company has launched its service or product and now has to focus on scaling and procuring market share for its product or service.[iii]

Therefore, series B funding is used to grow the company in such a way so that the company can meet its product’s demand in the market. The company bulks on employees, sales, advertisement, tech, business development, support, and entering into new markets for the company through the corpus received under series B funding.[iv] It is at this stage where the business tends to make considerable amounts of profits, including super-profits. This round is beneficial to the investor as well as to the investor because the investment made here is less risky as compared to other investments made till now.

Mediums through which the Business receives Series-B Funding

The channels which companies use to inculcate Series-B funding may differ from private agreement to public markets, and in return, the investor receives equity in the company. Venture capitalist and debt financing is a common method to raise this category of funding. Another method can be revenue sharing, acquisitions of LoCs, etc. Some businesses can be classified as startups, depending upon their business model.

Series-C Funding

Businesses who require or invite investors to invest in the business under the category of Series-C funding, are businesses that are already established, profitable, have a good market share, and are developed businesses. Every business is presented through a graph of the business cycle. After reaching its peak, the business tends to contract to a trough.[v] To re-enter the expansion stage, the business needs to expand its product line or service or acquire another company. In Series-C, groups such as hedge funds, investment banks, private equity firms tend to participate in this type of funding. Businesses are valued at more than $100 million. In this stage of funding, businesses tend to raise more $50 million of funding. ‘Magic Leap’ raised nearly $ 1 billion at this stage. Like ‘Uniphore Pvt. Ltd.’ received around $4 million dollars from ‘March Capital Partners’ as Series-C funding in July 2019 in India. Therefore, there are no hard and fast rules describing what Series C funding is used for or what the minimum dollar amount should be, so even small businesses can reach this funding round.

State of the Business during Series-C Funding

The business is on the stage of expansion and on a fast track to reach its peak. Series-C funding is injected into the business in an effort to receive maximum profits and grow the business as quickly as possible. The groups mentioned above tend to participate in this type of funding as the business already has proven itself and well established in the market. This funding is also done when the business wants to introduce a new product or wants to formulate another form of undertaking under itself. This stage can be considered with the business participating in Initial Public Offer.

Mediums through which the Business receives Series-C Funding

Series-C funding is generally raised by the sale of a preferred share or equity shares. If preference shares are issued, then they are likely to be convertible shares. Moreover, the holders can be offered the right to exchange them for common stock in the company at some date in the future. To some extent, the business receiving Series-B funding can be called or referred to as start-ups, but strictly speaking, the business receiving Series-C funding cannot be referred to as start-ups. They have matured running businesses in a competitive market. [vi]

Moving forwards

There is a need to get Series C funding right the first time. Many companies end their funding rounds with Series C. Investors who see or interpret that you’re on Series D, E, or even F will proceed with caution because any funding rounds after Series C is a strong indicator that your Series C round failed, and you need additional funds to try again.

Through the rounds of investment, the original business owners tend to give up more of the company’s shareholding, diluting their own position and power. However, the company has grown at this point and become more valuable with each stage of financing. After Series C funding, the original owners hold a smaller slice of a larger company, but, as ground-floor investors, their shares have ideally increased considerably in value. So while there are more partners and investors to answer to, major decisions likely can’t be made as swiftly or independently as in the past.

Major Players for Fundraising

Top Private Equity Firms in the World

  1. The Carlyle Group – Washington D.C., USA
  2. Kohlberg Kravis Roberts (KKR) – New York City, USA
  3. The Blackstone Group – New York City, USA
  4. The Apollo Global Management – New York City, USA
  5. TPG – Fort Worth

Top Venture Capitalist Firms in India

  1. Helion Venture Partners
  2. Accel Partners
  3. Blume Ventures
  4. Sequoia Capital India
  5. Nexus Venture Partners

Online Crowdfunding Platforms (donation based funding)

  1. Kick Starter
  2. Indiegogo
  3. Go Fund Me
  4. Crowd Rise
  5. Pledge Music

Active Angel Investors in India

  1. Sanjay Mehta – Mumbai
  2. Abhishek Bhatewara – Bengaluru
  3. Ananda Govindaluri – Singapore
  4. Anoop Mathur – Mumbai
  5. Bharat Banka – Mumbai

Top Hedge Funds Investing in India

  1. Tiger Global
  2. Softbank
  3. DST Global
  4. Kohlberg Kravis Roberts (KKR)
  5. Warburg Pincus



[i] Series A, B, C Funding: How it work, available at:, (last visited 20th May 2020)

[ii] Indian Startup Funding & Investment Chart, available at: (last visited 20th May 2020)


[iv] Series B Financing, available at: (last visited 20th May 2020)

[v] Serieas A, B, C Funding: How it work, available at:, (last visited 20th May 2020)

[vi] How Funding Rounds Work for Startups, available at: (last visited 20th May 2020)

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.


Please enter your comment!
Please enter your name here