Funding is an important part of the modern business environment, and the one that everyone hypes up is the big Series A round of funding.
With bootstrap funding, pre-seed and seed round helping to get a startup off of the ground, the focus then turns to becoming viable, appealing, and accessible to Series A funding.
Knowing the what, when, and how can be tricky. Here, we go through these key points to help your business take the next step.
What is Series A funding?
Series A funding is essentially the next phase of capital fundraising that usually takes place after seed funding for a startup. Seed funding is intended to get the business going and prototypes made – after those initial investments, companies needing to raise more capital will be in the market for Series A funding.
Your company will need to establish a track record with revenue figures, proof of
concept, a set number of users, or other performance indicators. This is because Series A rounds typically aim to raise significantly more money than initial funding rounds, and are aimed at greatly increasing the potential of a proven startup.
When is it the right time to look into Series A funding?
In terms of business progression, the right time to look into Series A funding is after you’ve cultivated a user base, consistently hit good revenue figures, or have a working prototype with customer research – now you’ll need capital to take the startup to the next level. It’s that point where you have proof and traction – you can show you have potential – but you haven’t got the finances to develop further.
In terms of when to look for investors, January and particularly February are the best months of the year. Founders fundraise throughout the year, but it’s evident that if you pitch in the first two months, potential investors are far more likely to spend more time reviewing your pitch deck. Not ready in January? Try September instead – it was found to be the third-best month, although not as strong as the beginning of the year.
How do you go about raising Series A funding?
With the business going along well, and you looking like a hot prospect for Series A funding, it’s time to seek out investors. However, before you do this, you need to understand your business and its value. Calculate a valuation for your company based on its current earnings, if any, and how much revenue you might generate over the next five years. Then, seek potential investors and prepare your pitch deck and presentation.
The standard way to fundraise is to get in touch with people who can connect you to investors, prepare your pitch deck, and then meet potential investors to present your pitch.
Alternatively, there’s a Series A round funding platform online which aims to supercharge your bid for investment. On the platform, you can create a Pitch page to send to potential investors, create documents for your deal, and share documents and sign online. So, if you’re new to Series A fundraising, an online service can simplify the entire process.
Series A funding is a big step for a startup, but for many, it’s the point at which all of your previous hard work is rewarded with strong investments that allow your company to grow towards its potential.