Venture capital funds invest in start-up or earlier stage companies that require financing to grow. The process for raising funds is often categorized as either Pre-seed, Seed, Series A, Series B, or Series C, depending on the size and history of the company. In order to understand what the future revenue, expenses, and cash flow might look like and estimate valuation, Venture Capital investors create projection and DCF models. It is also important for investors to model different scenarios. The complexity of the financial modeling usually depends on the size of the venture capital fund and the stage at which they are investing in. Seed C investments will involve more sophisticated modeling than seed investments, for example, since they involve larger and more mature companies and larger investment cheques.