7 ms·
As someone who knows admittedly knows nothing about startup funding rounds, how many more rounds of funding can they do before an IPO? Is it effectively infinit
by GenerWork 4mo ago
As someone who knows admittedly knows nothing about startup funding rounds, how many more rounds of funding can they do before an IPO? Is it effectively infinite?
- toasty228 4mo agoOnce they reach series Z does it go back to A or do we get a new format like AA, AB ?
- Npovview 4mo agoWe live in Unicode times. We switch to Greek alphabets. α β γ δ ε ζ η θ ι κ λ μ ν ξ ο π ρ σ τ υ φ χ ψ ω
- tomwheeler 4mo agoAfter those are used up, it moves to Devanagari, Hangul, Katakana, Hiragana, and then Kanji.
- re-thc 4mo agoYes, whatever you like
- dkdcdev 4mo agoI believe the canonical example is Databricks on round L
- nerdsniper 4mo agoI believe Databricks series L round raised $4B in late 2025, but earlier this year they raised another $5B so technically they've maybe completed series M round and are "on" series N round now? The press releases are a bit confusing to me.
- tomwheeler 4mo agoIt's semantics, but the latest raise might have been a follow-on to Series M, not a new round (to be clear, I know nothing about their finances, just speaking from experience at another company).
- jmathai 4mo agoI imagine there are ways for existing investors to achieve liquidity while still raising venture funding. But an IPO is "the" liquidity event and I imagine there will be pressure from investors for that. I also imagine that venture funding rounds have a lower ceiling than the public markets - but at these rounds I'm not so sure!
- wina 4mo agothey can do as many as they want. but at some point investors need/want to exit their positions and push for an IPO. That point is different for every company.
- ielillo 4mo agousually you would go through seed funding, the series a,b, and possibly a1 and b1. If you entered c or d territory it meant that you still had a chance but vc would be following you very closely. After d, you could raise money, but it would be under very unfavorable conditions
- vidarh 4mo agoThe number of rounds is irrelevant. Having crunched the data, what is relevant to terms is simply as you'd expect the rate of growth. The only reason it rarely happens with fast growing companies is that the liquidity of an IPO is attractive. As a result, companies doing many rounds are disproportionately companies that are performing too poorly to try and IPO.
- tomwheeler 4mo agoEffectively infinite. Databricks is a good example. They're still private after 13 years and closed a Series L round last year. Stripe is similar. Having been through an IPO before, it was good for employee liquidity, but bad for the culture and long-term success of the company.
- charlie0 4mo agoDead capital. There's no need for public funding until they are reasy to cash out at the top, if ever.
- solenoid0937 4mo agoHow do investors cash out? Do they sell to new round investors?
- bix6 4mo agoCorrect. There is also a secondary market.
- barbarr 4mo agoGoing off the other reply, I wonder if a highly-active secondary market means that companies can raise series [A-Z]+ rounds effectively forever, where each "round" just refers to a giant purchase of shares under strict company supervision. Is this the new game for startups?
- DenisM 4mo agoIf investor pool becomes too loose the company becomes de facto public, subject to all SEC-enforced regulations. The judgment is subjective though, so pushing the boundaries could be a calculated risk.
- epolanski 4mo ago> There's no need for public funding You're assuming private liquidity to be infinite and private credit (that fuels VCs) to always have favorable rates.
- rvz 4mo agoDepends on the investors if they see growth. The downside is dilution. Preferably they just want the Series I as the IPO in this case. They cannot raise forever, SpaceX has done more rounds but the timing is most important.