A startup’s journey is anything but linear. It goes through key phases, each requiring different resources, performance metrics… and the right kind of investors.

The Startup Lifecycle: Clearly Defined Stages

Traditionally, a startup progresses through several stages:

Ideation / Pre-seed: validating the problem and solution, forming the founding team, initial product sketches.
Seed stage: building the product, making first sales, validating the business model.
Early stage / Series A: accelerating growth, structuring the commercial side, proving scalability.
Growth / Series B and beyond: geographic or vertical expansion, rapid revenue growth.
Pre-IPO / Exit: business model maturity, profitability or strong traction, exit via acquisition or IPO.

At each stage, the startup must reach specific metrics to convince the next category of investors.

Typical milestones include:

Commercial traction (MRR, ARR, CAC/LTV)
User retention or growth rate
Regulatory or technical validation
Team structure and recruitment
First market penetration

The Equity Gap: That Critical Moment When Capital Is Missing

Between these stages, there is often an “equity gap”—a period when the startup needs capital to validate key hypotheses but isn’t yet mature enough to attract professional investors (VCs, growth funds).

This gap may appear:

Between seed and Series A
After some initial revenue, but before solid KPIs
When the risk is still considered too high despite a working product

Ironically, this is often when the need for capital is most urgent, to avoid losing momentum or missing a market opportunity.

Why Turn to Crowdfunding at This Stage?

Crowdfunding—especially equity crowdfunding—can play a crucial role in bridging this gap:

Retail investors often tolerate higher risk than institutional ones.
Amounts raised (typically €50k–€1M) fit the bridge financing needs perfectly.
Valuations are still modest, offering high return potential.
Public campaigns can also serve as powerful marketing and customer traction tools.

Why So Many Funding Rounds? Each Has Its Purpose

People are often surprised by how many funding rounds startups go through. But this is both logical and healthy.

Each round serves a clear purpose:

Pre-seed validates the product
Seed validates the market
Series A validates scalability
Series B+ funds growth
And so on

The Role of Early-Stage Investors

Investing early means accepting more uncertainty. But it also means access to opportunities that no institutional fund is touching yet. This is where crowdfunding makes sense: democratizing access to critical stages of entrepreneurial development.

Platforms must therefore help visualize what the startup has already accomplished, what remains to be proven, and how the funds raised will serve as a springboard toward the next level.