Glossary Category: Funding Investment

Seed funding typically comes after a founder has exhausted personal savings and friends-and-family money, and before a startup is ready for a full Series A. It’s usually raised from angel investors, seed-focused VC funds, accelerators, or increasingly, corporate venture arms, and is meant to fund the work of building a minimum viable product, hiring an initial team, and finding early evidence that customers actually want what’s being built.

A seed round sets the foundation of the startup’s cap table and establishes the metrics bar — user growth, revenue, engagement — that the founder will need to clear in order to raise a Series A later. Seed rounds vary enormously in size and structure across markets: in some ecosystems they’re raised almost entirely via SAFEs or convertible notes to keep legal costs low, while in others straightforward priced equity rounds are more common.

A nuance beginners miss: “seed” isn’t a strictly defined dollar amount — what counts as a seed round in one market or era can look like what another market calls pre-seed or even Series A, so the label matters less than understanding what stage of proof the company has actually reached.

🇵🇭 Philippine Example

The Manila Angel Investors Network (MAIN) is one of the most active sources of seed-stage capital in the Philippines, having backed early-stage companies such as Kumu, Booky, and TANGGapp before they went on to raise larger institutional rounds. More broadly, overall Philippine startup equity funding was reported at roughly US$120 million in 2025, with early-stage activity making up the bulk of deal volume, according to Philippine business press coverage.

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The two main paths to an exit are acquisition (another company buys the startup outright) or an IPO (the company lists its shares on a public stock exchange). Either way, an exit is the moment when equity that previously only existed on paper — in a cap table, in a term sheet — finally converts into real, spendable money for founders, employees holding stock options, and investors.

Exits matter structurally to the entire venture capital model: VC funds are built on the assumption that most portfolio companies will fail or stay private indefinitely, and the fund’s returns to its own investors (LPs) depend entirely on the minority of companies that do eventually exit, especially the few standout successes. A nuance worth knowing: not every exit is a triumphant story — an “acquihire” (where a buyer is really acquiring the team rather than the product) and a distressed or fire-sale acquisition both technically count as exits too, just far less favorable ones for everyone holding equity.

🇵🇭 Philippine Example

Coins.ph, one of the Philippines' earliest and best-known fintech and cryptocurrency startups, was acquired by Indonesian ride-hailing and payments company GoJek in 2019 — one of the first clearly documented startup exits in the Philippine tech ecosystem.

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Due diligence covers financial statements, the accuracy of the cap table, existing contracts, who actually owns the company’s intellectual property, any pending litigation, regulatory compliance, and reference checks on the founders themselves. It usually happens after a term sheet has been signed but before money actually moves and the final legal documents are executed — it’s the investor’s chance to verify that everything represented during the pitch is actually true.

Due diligence matters because this is where deals commonly die even after a term sheet looked all but done — most often over a messy or inaccurate cap table, undisclosed liabilities, or intellectual property that turns out not to be properly owned by the company at all. A nuance beginners often miss: diligence isn’t only the investor protecting themselves — a founder doing their own diligence on a prospective investor (their reputation, how they’ve treated founders in past deals, whether their fund actually has money left to invest) matters just as much, and first-time founders frequently skip this side of the process entirely.

🇵🇭 Philippine Example

For Philippine startups, due diligence commonly includes confirming good standing and registration with the Securities and Exchange Commission, verifying Bureau of Internal Revenue tax compliance, and checking that any government grants or incentive programs (for example, from the Department of Trade and Industry or the Department of Science and Technology) were properly documented — in addition to the standard cap table and contract review any investor anywhere would perform.

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A SAFE (Simple Agreement for Future Equity) was created by startup accelerator Y Combinator in 2013 as a simpler alternative to the convertible note — it carries no interest and no maturity date, and converts into equity automatically once the startup raises its next priced round, usually at a valuation cap and/or discount that rewards the earliest investors. Because it’s just a handful of pages with mostly standardized terms, a SAFE is extremely fast and cheap to sign compared to a full priced equity round.

That simplicity is exactly why SAFEs have become dominant in the earliest stages of US startup fundraising — reportedly used in roughly 90% of pre-seed deals tracked by the equity-management platform Carta in early 2025. A nuance worth knowing: a SAFE is not a universal global standard — whether it’s legally treated as a security, how it’s taxed, and whether local corporate law recognizes it cleanly all vary by country, so a founder shouldn’t assume a US-style SAFE template works as-is outside the US.

🇵🇭 Philippine Example

SAFEs are far less standardized and common in the Philippine startup market than in the US, since the Revised Corporation Code and Securities and Exchange Commission rules around share issuance mean many Philippine startup lawyers still favor either a straightforward priced equity round or a convertible note with clearer, more locally familiar debt characteristics. Philippine founders sometimes encounter a SAFE for the first time through a US-based accelerator or international investor rather than through a purely local deal.

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A convertible note is legally structured as debt — it accrues interest and has a maturity date — but everyone involved generally intends for it to convert into shares rather than actually be repaid in cash. Notes typically include a valuation cap and/or a discount rate that rewards the note holder for investing early, before the company’s value has been formally priced, by converting their money into equity at a better rate than the next round’s official price.

Convertible notes are popular for pre-seed, seed, and bridge financing because they’re faster and cheaper to draft than a full priced equity round, letting a startup close a small round of funding without first negotiating an exact valuation. A nuance worth knowing: because a note is technically a loan, an unconverted note approaching its maturity date can create real pressure — the company may technically owe repayment or interest — which is exactly the friction that a SAFE (which has no maturity date or interest) was designed to remove.

🇵🇭 Philippine Example

Convertible notes are used by some Philippine startups as bridge financing between priced rounds, but they need to be structured carefully under Philippine corporate and tax rules — including how any accrued interest and documentary stamp tax are treated — so many local startup lawyers still favor a straightforward priced equity round for a company's core institutional financing. No specific, unambiguous public example of a named Philippine convertible note round could be confidently verified for this entry, so this example is kept general rather than citing an unconfirmed deal.

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A bridge round is usually raised from existing investors and is often structured as a convertible note or SAFE rather than a fully new priced equity round, since that’s faster and cheaper to paper. Startups raise bridges when they need a few more months of runway to hit a milestone that would support a stronger next round, or when broader market conditions temporarily make it hard to close a good priced round at all.

For founders, a single bridge round isn’t automatically a bad sign — it can simply reflect smart timing. What investors actually watch for as a warning sign is a pattern of repeated bridges without the company hitting new milestones in between, which suggests the business isn’t actually progressing. Bridge terms often include a valuation cap or discount rate that determines how the bridge investor’s money converts once the next priced round sets an actual share price.

🇵🇭 Philippine Example

No specific, individually confirmed Philippine bridge round could be verified for this entry, so this example is deliberately kept general rather than naming an unverified deal. In a market where later-stage, follow-on capital is reported to be scarcer than in neighboring Southeast Asian countries, bridge financing from existing local angel networks or investors is a common, pragmatic way Philippine startups extend their runway between larger priced rounds.

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Series C rounds typically involve larger growth-equity or private-equity-style investors, and the due diligence at this stage focuses more heavily on financial metrics and unit economics than on product or market risk, which earlier-stage investors accept as still unresolved. The money is often used for geographic expansion, acquiring smaller competitors, or building toward a later IPO or acquisition.

Because very few Philippine startups have reached this stage, a Series C round is a significant milestone for the wider ecosystem, not just for the individual company — it signals to other investors that a market can produce companies durable enough to justify late-stage capital. A nuance worth knowing: the A/B/C naming convention is a loose industry norm, not a strict rule — some companies raise rounds that function like extensions or bridges but still get labeled with the next letter in sequence.

🇵🇭 Philippine Example

GrowSari, the Manila-based platform that helps small sari-sari stores digitize their operations, added US$77.5 million to its Series C in March 2022 from investors including the International Finance Corporation, KKR, Wavemaker Partners, and Temasek's Pavilion Capital. Separately, Kumu became the Philippines' first Series C startup a few months earlier, closing a US$73.7 million round in October 2021 led by General Atlantic, bringing its total funding raised to over US$100 million.

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By the time a startup raises a Series B, the core question has shifted from “does this business model work” to “how big can this get” — the money is typically used to scale go-to-market efforts, expand into new markets or product lines, and hire aggressively. Series B investors are usually growth-stage VC funds, sometimes joined by the company’s existing seed and Series A investors doing follow-on (pro-rata) investments to maintain their ownership percentage.

A nuance worth knowing: not every successful startup raises or needs a Series B — some choose to stay smaller and reach profitability instead, particularly in markets where the addressable market size doesn’t support the kind of scale VC investors are looking for. Skipping a Series B by choice is not itself a failure signal, even though it’s less visible in funding news than a big new round announcement.

🇵🇭 Philippine Example

Kumu closed its Series B round in mid-2021, co-led by SIG and Openspace Ventures, with participation from returning investors Kickstart Ventures, Foxmont Capital Partners, and Summit Media — reportedly targeting around US$15 million — closing less than 12 months after its April 2020 Series A.

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Series A rounds are distinguished from seed rounds by the level of proof required: instead of betting mainly on the team and idea, Series A investors want to see demonstrated traction — real user growth, revenue, or engagement data — showing the business model itself, not just the product concept, is working. A Series A is usually led by one institutional VC firm that sets the price and terms, often takes a formal board seat, and brings more complex governance (protective provisions, pro-rata rights, formal reporting) than a seed round typically involves.

Raising a Series A is often described as the hardest jump in a startup’s early life, since it’s the first round where “we have a good idea and a capable team” is no longer enough on its own — a founder needs real numbers. For the ecosystem as a whole, the rate at which seed-stage companies successfully convert into Series A companies is a key health signal for how mature a startup market is becoming.

🇵🇭 Philippine Example

Kumu, the Filipino live-streaming and social entertainment app, raised its Series A in April 2020 — an early institutional vote of confidence in its live-streaming model that set up its subsequent Series B in mid-2021 and, later that same year, the country's first Series C round.

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An angel investor is usually a successful entrepreneur or executive who writes a personal check — not a fund manager investing other people’s money — into a startup that’s often still pre-revenue or barely generating any. Angels typically invest earlier and take on more risk than venture capital firms, filling the gap between founders’ own savings/friends-and-family money and the larger, more structured rounds that professional VCs lead.

Because the check comes from one person’s own pocket, angel deals tend to move faster and involve simpler paperwork than a VC round, though the same core protections (equity stake, sometimes a board observer seat or basic information rights) still apply. Angels often invest in industries they know personally, and the best ones bring hands-on mentorship, credibility, and introductions along with the money — not just capital.

The nuance beginners miss: an angel check is rarely enough on its own to fund a startup for long, and a strong angel is valuable less for the dollar amount and more for whether their name and network actually help the next round happen.

🇵🇭 Philippine Example

The Manila Angel Investors Network (MAIN), founded in 2016 and registered with the Securities and Exchange Commission as a non-stock, non-profit organization, is the largest committed private investor network in the Philippines. MAIN invests in pre-seed, seed, and Series A rounds and has backed early-stage Philippine companies including Kumu, Booky, and TANGGapp.

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