This is how I see it in software companies, although they are generalizations that vary A LOT depending on the type of company:
Pre-Seed (in general, with angel investor capital individually):
You have a founding team (of two or three people). The ideal is to have a co-founder with a more technical profile, assuming you are not.
You have a pretty clear idea of the problem you address and how to solve it. Even you may have an MVP (minimum viable product) of the product.
You want to raise a relatively small round (just under half a million dollars) to develop and test the product.
You have no income for now.
An example: Before raising some capital, the founders of Liftit did market tests with their first product spending five dollars a day on Facebook ads, coordinating with customers and drivers through WhatsApp. Nathan Lustig explains it very well in this episode of his podcast (in English, sorry!).
Seed (Ideally, at this point you already have an institutional investor):
You want to hire more members for your team (around 10) to focus on developing and scaling the product. These profiles would be a mix of engineers and a couple of people focused on growth.
You already have a product running in the market, used by a growing number of customers. You have to be able to demonstrate your traction with data.
Surely you have started to generate some income. Especially if you are a B2b or SaaS startup, but a little, just as a pilot experience.
The focus is NOT necessarily on revenue, but on continuing to develop the product and iterate, grow in users, its retention and attachment.
In this phase you are confident that what you have done is a product that fits the market.
You want to expand your growth team (around 25 people). If before your team was purely technical, now it will be more than growth. Surely you already hire someone who is dedicated to signing and hiring in your place.
You have your own sales team and you are making one dedicated to taking care of the customer, focused on increasing sales and maintaining customer retention.
You are generating income (below one million dollars) and are confident in being able to double or triple that income quickly.
Most companies hire their most experienced leadership team right after Series B. This ensures they have the VPs (vice presidents) to lead the company in the hyper-growth that is yet to come.
The usual thing is to also have a full-time Human Resources person. The team will already be more than 50 people.
Revenue has doubled or tripled since the A series. You are already mindful of getting $ 100 million in revenue over the next three or five years. Your customer retention is the strongest.
You are clear that you can defend your product against competitors.
From this point on, the life cycle of each startup varies too much to generalize! Many companies take off and another remain flat at 10 million revenues and do not rise as much as they did until then. It is very likely that they will be acquired by others. The decision to continue investing then is a matter of pure financial nature than anything else. With some exceptions, like the case of deeptech or biotech, let’s think of cars without drivers.