Second Stage Capital

Second Stage Capital Meaning:
In venture capital terminology, the term Second Stage Capital refers to capital provided to an existing company to meet its need for additional working capital. Second Stage Capital will usually be required after production has already begun.

Second Stage Capital Example:
For example, a company has begun production of a new line of widgets, and the company knows that a market exists for the widgets and that whatever numbers of widgets the company produces will be sold. Nevertheless, the company currently has only enough capital to produce a limited amount of product which will not be sufficient to provide for the further growth of the company. Second Stage Capital will provide the working capital needed for such a company to continue producing the widgets and will finance the company's growth at this key stage in the evolution of a successful start-up company.