As an entrepreneur, your initial capital may have been from the likes of seed fund invested by family, friends or the angel investor. These funds sufficed the needs in assisting you with the R&D, team salary, testing and proof of concept. After attaining the proof of concept and development milestones, the next step is to attract investors for the succeeding funds. Series A funding or investment is the first round of funding which can be led by a single investor or more.
The Significance of Series A Funding
This funding is the market of the buyers and investors possess the power of declining investment to companies. Series A Funding can see an organization raise somewhere around $2-$5 million against about 20-25% of their firm. Its successful acquisition will make sure that the project gets completed, a stream of revenue is in place, technology dangers are removed, and the organization is all set for the bigger funding of Series B. To know more, visit Challenge Advisory – What Is Series A Investment.
Ways of Availing Series A Funding
Now that you know the basics of Series A funding, you must be well aware that availing it is no cakewalk yet at the same time not something impossible either. Here a proper strategy is required to make sure that you are fully ready. Take a look at some insider tips to aid you in this procedure.
- Evaluation Parameters- Being the founder you should know the parameters which are used by the VCs for evaluating any startup. They usually look for the validation of ideas, customer acquisition, traction, management system, team, and the final product. Besides, they also consider the stage of the startup, target equity, location, and market space.
- Consider the Prospective Team- As opposed to the seed stage, the investor will lay more emphasis on the potential of scaling the business. Despite having a good and strong team, it is wise to hire the best quality team along with expanding the same in the near future.
- Look for a Lead Investor- Ensure to invest quality time to get hold of a lead investor that can complement your business. As you begin to grow, the advice will act as worthy as money. Remember the lead investor requires having contacts and knowledge in your particular space.
- Lay Emphasis on the Close- Despite getting a green signal from the VCs for investing in your company, the real legal procedure will be a lengthy one. That can take about 3-6 months for completing the paperwork. Just be ready with the attorney along with the needed paperwork for expediting the process.
- Deal Terms- Getting the terms of the deal right as well as in line with the business goals is crucial. Though being keen in securing the initial venture funding round, you should remember that bringing the deal to a close is not the sole target. Emphasize this round because it will act as the foundation for the future financing rounds.
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