If a company requires additional funding beyond the seed investment round, it will seek capital through a Series A investment round. Series A is when most typical venture capital firms seek to invest and the funding is primarily used to improve the product or service in the startup and begin to realize initial growth and scale.
If the company continues to show success, it may require additional funding to help build the company after the product or service is proven. The source of funding to do so often comes from a Series B investment round.
Series C follows Series B with the goal of being able to truly scale the product to facilitate growth of the company. By this point, investments are less risky since the company has generally shown market acceptance. Larger institutional investors, such as investment banks and private equity firms often enter at this stage of investment.
While there can be additional rounds of funding after this, a liquidity event is often sought after a Series C investment round, which can be in the form of a sale of the business to a strategic buyer or in the form of an initial public offering (IPO) by the company.