You are still in an early stage of development and you are growing organically. During this stage, you’re likely still getting operations off the ground.
You have not formally raised a significant amount of finance/investment. Your funding may have come from your own savings, friends, family or via crowd-funding platforms and they likely do not have any stake (equity) in your company.
This is the first official investment stage. At this stage, your operations have stabilized and you’ve sought additional external funds to gain more traction and to accelerate growth. At this stage, the investors (angel investors, founders, friends, family, incubators, venture capital companies) take equity in your company.
You have any established track record (an established user base, consistent revenue figures, or some other key performance indicator), you’ve moved past your development stage and you’re at the stage where you’re developing new products, expanding into new markets or acquiring other companies. To support this rapid growth, you have gone beyond your first round of formal investment to raise more finance (often above $1 million).
The investment is usually in the form of equity investment or convertible loans and is likely to come from experienced investors and have clear shareholder rights.