The capital
There are no phases without capital. For each phase of the path there is a financier whose trade is exactly that level of risk. Capital can enter at any phase, from the angel who accompanies the capture of the problem to the industrial buyer at liquidity. What changes is who they are, with what instrument they enter, with what ticket and at what price they buy the risk.
How much the startup is worth at each phase, against the cost: value and cost.
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The tickets are orders of magnitude from the Spanish and European market of recent years: indicative, varying by sector and by cycle, and declared as such. The values applicable to a specific project are reviewed after qualification.
Who: Volcano and its partners; visionary angels.
Instruments: Own resources; services revenue; very early equity.
Typical ticket: Angels: €10,000–50,000 per person.
Here capital buys the cheapest option of all: knowing whether the problem deserves the rest of the journey.
Who: Tax investors (Tax Lease); non-repayable funding and grants (CDTI and Canary instruments); FFF; angels.
Instruments: AIE / tax investment; grant; initial equity.
Typical ticket: Grants: €25,000–500,000 per project · Tax Lease: the budget of the F3–F7 window; the amount per investor is sized on their tax liability (see the simulator) · FFF: €5,000–50,000.
It is the heart of the Volcano model: tax investment funds the riskiest window, and the tax investor's return is certain because it does not depend on the project's success.
Who: Angels; convertible note; pre-seed and early seed; crowdfunding.
Instruments: Convertibles; SAFE; seed equity.
Typical ticket: Convertible note: €50,000–300,000 · Pre-seed: €100,000–500,000 · Crowdfunding: €50,000–500,000.
Private capital comes in here with the technical risk already reduced: the thesis of the whole site, in one phase.
Who: Seed and Series A funds; revenue-based financing.
Instruments: Equity; RBF on recurring revenue.
Typical ticket: Seed: €300,000–1,500,000 · Series A: €2–8M in Spain, higher in the European hubs · RBF: €50,000–1,000,000.
The frontier of premature scaling: funding growth BEFORE product-market fit is the most documented trap in the sector.
Who: Series B; venture debt; banks once the cash flows support it.
Instruments: Growth equity; debt.
Typical ticket: Series B: €8–25M · Venture debt: €1–10M · Banks: according to cash flows, no useful range.
Debt becomes rational exactly when it stops being necessary to survive.
Who: Growth equity; international funds; project finance.
Instruments: Equity; dedicated structures per asset.
Typical ticket: Growth: from €20M · Project finance: according to the asset.
The model is no longer being proved: it is being multiplied.
Who: Industrial buyers (M&A); secondary market; listed markets.
Instruments: Sale and purchase; listing (BME Growth, stock exchange).
Typical ticket: No range: the price is made by the market.
Liquidity belongs to the investor, not to the company: it closes the path the problem opened.
Who funds what: the bands of capital
The most dangerous stretch of this map has a name every innovation textbook knows: the valley of death. It begins on day one. From the moment work starts without revenue, the project's accumulated cash goes down, and keeps going down as long as the R&D lasts. The deepest point comes right at the end of the R&D: the product already exists, the revenue does not yet. Most projects die there, and not because they are bad. Traditional financing withdraws exactly where the need for cash explodes, because the prototype, the pilot and the certification cost ten or a hundred times more than desk research. Research grants have the mandate to produce knowledge, and they run out when the work gets close to the market. Venture capital sets its price with evidence (traction, customers, metrics), and before the MVP that evidence does not exist. Each instrument ends before the next begins, and the gap between the two falls at the bottom of the valley.
The Volcano model does not deny the valley: it crosses it with a flexible bridge: for each phase, the right financial instrument. On average, the bridge's instruments cover at least 70 % of the cost of the R&D: the curve of a Volcano project is, at a minimum, 70 % less deep than that of a project with no system. The Tax Lease's tax investment covers TRL 1 to TRL 8, that is, phases F3–F7 of the path, and to it are added national non-repayable funding and direct European funds. The tax investor's return is certain and does not depend on the project succeeding: that is why there is cash precisely where the market does not put it. The bridge does not promise the valley will disappear: it makes the curve less deep. And the depth is everything: if the project dies, the loss is the depth reached, and it is smaller; if it succeeds, the curve comes out of the negative sooner, because the climb of traction starts from much higher up.
The valley of death, and the flexible bridge
In the F3–F7 window: the riskiest of the path, covered by tax investment before private capital has to come in alone. It is the reason a Volcano startup reaches the market with the technical risk already paid for. To size your case: the tax investment simulator and the private investor simulator.
The window opens with paper. For the Tax Lease the technical memorandum is enough, and it comes with the concept formulated (TRL 2): it is the statement of the R&D activities to be carried out. The business plan is asked for by the other financiers, from public calls (CDTI, EIC) to investors. The cadence is this: the memorandum with TRL 2, the ex ante certification a few weeks later, and the ex post pieces at the close of each year.
Notice. Informational content: it does not constitute tax, legal or investment advice. Indicative figures; the rules and the market change, and the values of each case are reviewed after qualification.
