Startups Blog

Startups and Series A Funding: What Investors Are Looking For

Series A funding is a significant step in the growth and survival of growing startups. Beyond initial seeding and establishment, it is here where companies really start to take shape. However, what is it that investors are looking for from Series A potential? Let’s take a closer look.

 

Series A Funding

Market Potential and Promise

Crucially, investors will look deeper at the market potential before they even think about funding to Series A. At this point in the journey for all startups, they need to already have a plan of action in place for long-term growth. Is the potential market really going to be worth investor money moving forward?

Investors should take time to discuss market potential carefully with a company representative. What are their customer targets? Are they clear? If not, it may be worth holding off.

Intensive Growth

We all know that starter companies can grow incredibly quickly. The most successful ones, in any case, follow this pattern. Therefore, it’s essential to look for evidence of this in any company you want to push through Series A.

Any project looking for Series A funding should, ideally, have grown around three times over since inception. That might be too big an ask for some firms. However, for Series A money to be worth anything, investors are going to need to demand the best.

Creative Narratives

Different firms looking for Series A will pitch themselves in varying ways. That much is obvious. However, investors will try not to opt for those companies with little in the form of a story. The best innovators, and those likely to be worthy of their money, are creative enough to set up a story that’s worth following.

The most successful startups are those with stories that inspire and fascinate. However, backing up with facts and figures is going to be hugely important, too. Investors look for a firm that offers a balance of both, at the very least.

Big Partnerships

It’s likely that those companies looking for Series A funding will already have strong partnerships in place. If not, it may be time to walk away. Critical investments and interests from leading names and brands will only help add to investor confidence.

Therefore, savvy investors make sure to look at partners before they push any money forward. Does the target company have any leading names backing them up? Investors need as much confidence as possible that they are going to push through Series A and beyond.

Are All Startups Worthy of Series A Funding?

Yes – however, they need to consider how to pitch themselves. It is simple enough to find innovative bodies through a service such as Fundz. However, investors will look for more than just initial funding and big-name partnerships.

Startups looking for Series A Funding can use directories and direct networking to find the best funding channels. However, it is not so much the availability of a company, but how they conduct themselves that matters.

 

SOURCES

https://www.investopedia.com/articles/personal-finance/102015/series-b-c-funding-what-it-all-means-and-how-it-works.asp

https://digify.com/blog/raising-series-a-funding/

https://venturebeat.com/2018/11/20/startup-puberty-how-to-get-from-seed-to-series-a/

https://yourstory.com/2014/01/series-a-funding-tips?utm_pageloadtype=scroll

https://www.nfx.com/post/fundraising-checklist-13-proof-points-series-a/