Late stage

Late stage funding refers the third of three venture capital funding stages: seed stage, early stage and late stage. Note that the boundaries between these stages can be fluid, and the classification of a company can vary depending on the investor's perspective. There isn't a strict standard for the size of funding rounds, the specific milestones a start-up must achieve or even the exact timing of each stage.

At the late stage, companies have moved beyond the start-up phase of development and have rapidly growing sales, or have rapid growth potential.

The late stage involves scaling operations and getting ready for exit strategies. At this point in its life, a company will usually have a commercially available service or product in production but may not necessarily be profitable.

Late stage funding rounds include Series C, D, E, and beyond. These rounds involve larger amounts of capital, with deal sizes averaging 45 million dollars in Canada. The funds are used for various purposes, such as expanding into new geographic regions, launching new products or services, increasing market share, and preparing for an IPO or acquisition.

Investment at this stage is less risky for investors than at previous stages because the companies are now established in the marketplace and have overcome many of the challenges associated with product development, market validation and early growth.