STAGED FINANCING MODELS IN THE DEVELOPMENT PATH OF STARTUP PROJECTS

Abstract

This article examines how staged financing models support the development and growth of startup ventures. We explore the sequential funding process – from initial seed capital through successive venture rounds – and how each stage of financing aligns with a startup’s milestones and risks. Design/methodology: The study adopts a qualitative, literature-based approach, synthesizing current research and insights (including Kuckertz et al. 2025) on entrepreneurial finance and growth. Key concepts such as venture capital staging, milestone-based tranches, and capital acquisition strategies are analyzed. Findings: Staged financing is found to mitigate investor risk and help sort high-potential projects from weaker ones by funding startups in incremental rounds contingent on performance. Early-stage startups often rely on personal funds and angel investors; as ventures validate their business model and grow, they attract larger VC rounds. Each financing stage corresponds to developmental milestones – e.g. product development, market entry, scale expansion – creating a financing “ladder” aligned with the startup’s progress. Practical implications: Understanding staged financing helps entrepreneurs plan fundraising strategically, maintaining flexibility and control as their venture evolves. For investors, structured multi stage funding with performance milestones improves goal alignment and reduces exposure to failed projects. Originality/value: This article connects the entrepreneurial journey framework with financing theory, highlighting how capital acquisition strategies must evolve through a startup’s lifecycle. We offer an integrated perspective for founders and scholars on linking startup growth stages with appropriate financing models.