Question

Which of the following funding sources is specifically aimed at helping early-stage startups?

• A. Series funding
• B. Angel investment
• C. Corporate bonds
• D. Initial Public Offering (IPO)

Hint:

"Angels" help you fly when you are small. "IPO" is for when you've already become a giant.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
Different financial instruments and investors are suited for different phases of a company's lifecycle.
Step 2: Detailed Explanation:
1. Angel Investment (B): Angel investors are usually wealthy individuals who provide capital for a business start-up, usually in exchange for convertible debt or ownership equity. They are the primary source for very early-stage (Seed/Pre-seed) funding.
2. Series Funding (A): While Series A is relatively early, "Series funding" generally refers to the growth stages (A, B, C, etc.) that occur after a startup has some established traction.
3. Corporate Bonds (C): These are debt instruments used by large, established corporations to raise capital. Startups cannot issue bonds as they lack the credit rating and stable cash flows.
4. Initial Public Offering (D): This is when a private company first sells shares to the public. It is a "late-stage" event, occurring when a company is already large and successful.
Step 3: Final Answer:
Angel investment is the definitive answer for early-stage startup support.