Drip funding, also known as tranched funding, is a method of venture capital (VC) funding where the investment is provided in a series of smaller tranches, rather than as a single lump sum. This allows the startup to access funding as needed, rather than having to wait for a large sum to be raised.
Drip funding also allows VCs to spread out their risk by investing smaller amounts initially, and then investing more as the startup demonstrates progress and success. This approach is often used for early-stage startups that require more time to develop their product or service before seeking larger rounds of funding.