The course of action that makes a seed-funded startup acquire Series A Venture capital can often involve caveats that were not present in the first stage of funding. Because of this, most startup owners develop invalid stipulations and overestimate their confidence in securing the next level of venture capital they need, failing to realize that this new journey entails almost entirely different processes and strategies compared to the ones that were needed to raise seed level capital. According to our latest insights and continuous interaction with startup owners, we have quickly realized that this reason alone is what makes it difficult for startups who have minimal knowledge to succeed in raising Series A Round capital. In this article, we will talk about the fundamentals of raising Series A Funding and what steps you need to take in order to make this journey a success.
Improving Your Chances of Securing Series A Financing By Focusing On Seed Capital
Although the chances of successfully raising startup capital have increased nearly 4-times compared to the circumstances that were surrounding venture capital acquisition in 2012, less than 20% of early-stage companies succeed in even getting themselves the chance to talk to venture capitalists in the first place. As we have helped hundreds of startups in this journey, we are acutely certain that the reason why most startup owners do not receive the time and attention they deserve is because the level of attractiveness surrounding their business in the eyes of the investors was not sufficient. This can happen due to many factors. One of them is the amount of funding your company has raised in the seed funding stage - we will cover this in more depth in the following paragraph.
Building a Solid Foundation In Terms of Market Positioning
Investors are far more likely to consider providing Series A Funding for a startup that has received around $2.5-$3mm in seed capital. This is not just because it reinforces their confidence in your company - it’s because it is certain that startups who have secured this amount of capital will convert to the next stage of funding more easily. This is why successful execution in terms of securing your first stage of capital is an essential factor that sets up your startup for success in the market.
What Are The Fundamentals of Preparing For Series A Funding?
Surprisingly enough, a fairly decent amount of startup owners that are looking to raise Series A Funding have a tendency to overlook the due-diligence they need to do in terms of reconstructing their business plan in order to reflect the changes that were made to their business after the Seed Funding Phase. Having a business plan that reflects confidence in your ability to generate long-term revenue for your business is fundamental. The same strategy and business plan that secured the first level of capital for your startup will not be the plan of execution that will be sufficient for raising higher levels of venture capital in the future, such as Series B or Series C Funding.
One of the most practical pieces of advice we can give you in terms of reconstructing your business plan is to accurately reflect your progress and achievements after the first round of funding was executed. If you’re encountering difficulties on talking about the big picture, zoom in and focus on representing the achievements of your vital team members and/or your executive team - relevant achievements and objectives that were met after securing Seed capital will reinforce investor confidence in the overall vision of your startup.
Utilizing The Fundz Platform For Guidance and Networking
In addition to the insights that were provided in this article, seeking out advisors or using the leverage of online platforms such as Fundz will give you the necessary leeway you need to gain clarity about securing Series A Round Capital. Although Fundz is primarily used by companies who seek opportunities to target startups who just have raised capital, it can be a terrific tool in your arsenal for networking with companies who have raised the amount of capital you are looking to raise. Because of this, Challenge Advisory strongly recommends Fundz as an efficient tool for finding and networking with startups to make the journey of raising capital for startups easier. By successfully connecting with business owners who have achieved objectives you want to achieve, the practical insights you get can be just enough to get you and your business over the threshold.