alleryStart learning →Startups raise money in several rounds rather than one lump sum mainly to:
AAvoid all dilution
BLower investor risk
CSkip valuation
DAvoid paying tax
Answer & Solution
Correct answer: B. Lower investor risk
Staged rounds reduce investor risk and motivate entrepreneurs.
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Related questions
Down rounds were common after which events?A new round priced below the previous round's share price is a:Series A priced shares at 500 and Series B at 650. Series B is an:What happens to existing holders' ownership with each new financing round?Founders hold 100 of 125 shares after a round. Their stake is:Post-money is 90 crore with 150 shares outstanding. The value per share is:Founders own 100 shares. A new investor gets 25 new shares for 5 crore. Pre-money is:Founders hold 40 shares. An investor puts in 4 crore for 10 new shares. Post-money valuati