"A" Round Financing

Dictionary Says

Definition of '"A" Round Financing '

The first major round of business financing by private equity investors or venture capitalists. In private equity investing, an "A" round, or Series A financing, is usually in the form of convertible preferred stock. An "A" round by external investors generally takes place after the founders have used their seed money to provide a "proof of concept" demonstrating that their business concept is a viable - and eventually profitable - one.
Investopedia Says

Investopedia explains '"A" Round Financing '

When investing in companies, private equity investors typically prefer convertible preferred stock to common stock for the various rounds of financing, such as Series A, Series B etc., because of the special features of the security. Convertible preferred stock have features such as dividend accrual and convertibility into common stock, which may become very profitable. As well, preferred stock will have a higher degree of rights compared to a common shareholder.
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'"A" Round Financing '

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