Stages of Fund Investment

Companies can be invested into at different stages of their life-cycle.

Venture Capital Companies play an active role in a Fund’s Life-cycle, from sourcing and identifying the investments, raising equity from investors, monitoring the investment and growth of the companies’ value, to exit/liquidation of the funds and distribution of the earnings amongst the participants. That is the ultimate goal.

Fundamental to STAG’s ethos and approach is its team of highly qualified professionals, who seek to structure and promote Venture Capital Funds with investments in various fields of activity. Investments are generally, but not exclusively, made into start-ups, in business categories such as; Tourism related areas, Hospitality, Health and Healthcare, and Technology, as well as into others sectors that are deemed to offer opportunities to generate high growth and commercial opportunities.

‘Seed Capital’

The term seed capital refers to the type of financing used in the formation of a start-up. 

In this case the funding is provided by private investors, usually in exchange for an equity stake in the company, or for a share in the profit of a product. 

The majority of the seed capital a company raises, generally comes from business owner(s) and often family, friends, and other acquaintances. 

Seed capital funding is considered high-risk because the business is not fully functional and has no track record. Investors who provide seed capital funding often therefore do so for a stake in the company. 

Once a start-up has demonstrated feasibility, it is more likely to attract venture capital or angel investment, to provide the additional funds necessary to really get the business up and running.

‘Start-ups’

Venture capital investment companies (usually referred to as start-ups), are generally focused around a single flagship product or service, that the founder wants to bring to the international market. 

These companies typically do not have a fully developed business model and, more importantly, lack adequate capital to move on to the next phase of business. 

Generally the capital, raised at this stage will be used for marketing, creation of stock or the launching of a product (existent or new) and/or service.

‘Early stage’

This investment is aimed at newly established companies, which have completed the product development phase and have already managed to start a trade, but are not as yet earning any profit. 

Such funding is generally dedicated towards improving the manufacturing and distribution process, as well as undertaking marketing.

‘Growth stage’

Investment is targeted at companies that have proven their product in the market and have secured finance and income. They are in the process of growing and trying to scale up, but are possibly encountering some obstacles to achieving this growth. 

The focus here is not on pure innovation, but expanding on what is already working for the business.