Series B Financing

AAA

DEFINITION of 'Series B Financing'

The second round of financing for a business by private equity investors or venture capitalists. Successive rounds of financing or funding a business are termed Series A, Series B (and so on) financing. The Series B round will generally take place when the company has accomplished certain milestones in developing its business.




INVESTOPEDIA EXPLAINS 'Series B Financing'

Because the company will generally have advanced its business by the time of the B-round financing, it will typically have a higher valuation by this time. This means that the Series B investor will usually pay a higher price for investing in the company than the Series A investor. Private equity investors prefer convertible preferred stock to common stock for the various financing rounds because of the special features of preferred stock, such as dividend accrual and anti-dilution, that may not be available in common stock.

RELATED TERMS
  1. Exit Strategy

    1. The method by which a venture capitalist or business owner ...
  2. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  3. Series A Financing

    The first round of financing undergone for a new business venture ...
  4. Alphabet Rounds

    The early rounds of funding for a startup company, which get ...
  5. Antidilutive

    A term describing the effects of securities retirement, securities ...
  6. Franchise disclosure document

    A Franchise Disclosure Document (FDD) is a legal document presented ...
Related Articles
  1. What Is Private Equity?
    Investing Basics

    What Is Private Equity?

  2. Private Equity A Trendsetter For Stocks
    Mutual Funds & ETFs

    Private Equity A Trendsetter For Stocks

  3. How To Invest In Private Equity
    Mutual Funds & ETFs

    How To Invest In Private Equity

  4. Seek An Adventure In Venture Capital
    Personal Finance

    Seek An Adventure In Venture Capital

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center