Alphabet Rounds Law and Legal Definition

Alphabet rounds of financing are provided by early investors and venture capital (VC) firms, which are willing to invest in companies with limited operational histories on the hope of larger future gains. The early rounds of funding for a startup company, which get their name because the first is known as Series A financing, followed by Series B financing, and so on. Depending on the needs of the company, a Series A round of financing may be enough to propel the company to the point at which it can stand on its own operating cash flow. If a VC firm is participating in a later round of financing - a Series C financing, for example - its potential equity stake in the company will already be diluted, and it will need strong conviction that the company will earn a solid return before committing any funds to the startup.