What does 'Series A' typically represent in startup funding?

'Series A' typically represents the first major institutional funding round for a startup. At this stage, the company has usually developed its product or service to a certain extent and has begun to gain traction in the market, demonstrating some level of product-market fit. This type of funding is usually used to scale operations, expand the team, and further develop the product.

The capital raised during a Series A round often comes from venture capital firms and is crucial for startups as it sets the foundation for subsequent rounds of funding. This is different from initial funding which may focus on prototypes or early product development, or from later funding rounds that might cater to companies nearing an initial public offering (IPO). In contrast, small business loans do not typically involve the equity investment structure that is characteristic of Series A funding. Thus, identifying 'Series A' as the first major institutional funding round accurately captures its role in the startup funding landscape.