Luma Health Raises $6 Million for Doctor-Patient Message Software Link: https://
ID: 1170553 • Letter: L
Question
Luma Health Raises $6 Million for Doctor-Patient Message Software
Link: https://www.wsj.com/articles/luma-health-raises-6-million-for-doctor-patient-message-software-1526988600
Luma Health Inc., which makes software for two-way communication between doctors and patients, has raised $6.3 million in Series A funding. The financing will be used to develop more capabilities of the software and expand the company’s customer base. The software is designed to help clinics manage appointments, referrals and follow-ups through integrations with electronic health records and IT systems. The goal is to reduce missed appointments and communication breakdowns that result in wasted time and resources.
I nedd help answering the following Questions:
In a series A funding, what type of stock is typically issued to investors in exchange for their investment?
How does a Series A funding differ from a Series B funding?
Where would the inflow of cash from the funding be reflected in the financial statements?
Explanation / Answer
Series A funding is the first significant round of venture capital financing. In this round preferred stock are sold to investors in exchange for their investment.
Series A funding is given to the company for additional market research product optimization and finalization etc. But Series B funding is provided to scale up, beat the competition and gain the market share.
In cash flow statement, it will become part of the Cash from financing activity
In Balance sheet, Assets and liabilities will both increase by the funding amount
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