VCs typically invest through a structured process that includes multiple rounds of funding:
Seed Stage: The initial round of funding used to validate the idea and develop a minimum viable product (MVP). Series A: Funding used to scale the business, often focusing on product development and market entry. Series B and Beyond: Additional rounds of funding to further scale operations, enter new markets, and achieve profitability.
In exchange for their investment, VCs usually take an equity stake in the company and may also request seats on the board of directors to influence strategic decisions.