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Growing the Businesses of Tomorrow: Challenges and Prospects of Early-Stage Venture Capital Investment in Canada
Appendix B: A Brief Description of Stages of Company Development
The following is based on standard research methodologies used in Canada and the United States for tracking activity in the venture capital market.
Pre-Seed
- Typically, an innovative idea is developed in a research setting
- Early assessment of commercial potential occurs
- Particular attention is paid to intellectual property concerns
Seed-Stage
- First steps in an evolving business entity
- Typically, the business/product remains in conceptual phase
- The focus is on R&D and/or initial product development
Startup-Stage
- From concept to company formation
- Key elements of business management infrastructure are developed
- The focus is on continued development of one or more products
- Often, this phase is pre-revenue
Other Early-Stage
- From company formation to commercial operation
- Business management infrastructure is further developed
- Activity often includes initial marketing, sales and revenues
- Product development may include prototype testing (IT) or clinical trials (life sciences)
Expansion-Stage
- Company moves to full commercial operation
- Marketing and sales volume intensified, with one or more revenue-generating products
- Often, the business is breaking-even or profitable
- Some product development may still be taking place
Other Late-Stage
- An established company with full productive capacity
- The focus is on a range of high growth objectives
- Typically, there is a regular profit stream
- If the company is troubled, it may attempt a restart
