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. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  2. Alphabet Rounds

    The early rounds of funding for a startup company, which get ...
  3. Exit Strategy

    1. The method by which a venture capitalist or business owner ...
  4. Series A Financing

    The first round of financing undergone for a new business venture ...
  5. Antidilutive

    A term describing the effects of securities retirement, securities ...
  6. Path To Profitability (P2P)

    A clearly defined route to profitability as described in a business ...
RELATED FAQS
  1. If I retire in the Philippines, will I be able to work or start a small business?

    Foreign retirees entering the Philippines with plans to become permanent residents may start a business or work once they ... Read Full Answer >>
  2. How does an underwriter syndicate work together on an initial public offering (IPO)?

    An underwriting syndicate is a group of investment banks that share the responsibility of marketing the shares of a company ... Read Full Answer >>
  3. Who are Berkshire Hathaway's (BRK.A) main competitors?

    Led by renowned investor Warren Buffett, Berkshire Hathaway (BRK.A) is involved with multiple sectors of industry, facing ... Read Full Answer >>
  4. What are some good resources to help entrepreneurs develop a business model?

    There are a number of resources available for entrepreneurs developing business models. Online resources provided by bloggers, ... Read Full Answer >>
  5. What's the difference between a financial plan and a financial forecast?

    Selecting the appropriate business structure for a new company can present challenges to an entrepreneur. Considerations ... Read Full Answer >>
  6. What are some examples of how corporations manage short-term investments?

    One of the easiest ways for a business owner to reduce liability is to incorporate as a legal entity to enjoy the protection ... Read Full Answer >>
Related Articles
  1. Investing Basics

    What Is Private Equity?

    This investment vehicle attracts wealthy investors to increase the value of portfolio companies.
  2. Mutual Funds & ETFs

    Private Equity A Trendsetter For Stocks

    In this article, we'll show you how private equity sets the trend for stocks everywhere.
  3. Mutual Funds & ETFs

    How To Invest In Private Equity

    Private Equity might be a pricey investment, but returns are on the rise and the payoff could be big.
  4. Personal Finance

    Seek An Adventure In Venture Capital

    Make a career out of chasing down the "next big thing".
  5. Economics

    Explaining the Cash Budget

    A cash budget is a plan for the inflows and outflows of cash for a business or an individual.
  6. Stock Analysis

    Google Stock: A Tale of Two Share Classes

    Google stock comes in two different flavors with different rights for shareholders.
  7. Entrepreneurship

    Can I Become An Angel Investor?

    Because of SEC rules, you already need significant assets to become an angel investor.
  8. Economics

    Tech Startup Momentum Being Generated In Detroit

    Rising from the ashes in the once proud auto-manufacturing City of Detroit is a rapidly emerging tech startup scene that could prove to be its salvation.
  9. Entrepreneurship

    The 10 Richest Women In Fashion

    The top 10 richest women in fashion have many similarities as well as differences. From nationality to career trajectory, these women have established themselves in their own unique ways.
  10. Entrepreneurship

    8 Fascinating Traits Billionaires Have In Common

    A top-notch education isn't enough to strike it rich. Nothing compares to learning the habits of the world's famous entrepreneurs and industry leaders.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center