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Tech the Halls 12/14/21

A Complete Guide on How to Raise a Series A

An article we liked from Alpaca VC:

Playbook: How to raise a smart Series A

If your Seed stage startup has regularly been hitting milestones, you’ve likely begun thinking about your Series A.  How to raise a Series A

This financing round varies in size, commonly from $3 million to $15 million.

Our guide is a distillation of everything we know about successfully raising an A. It includes insights learned from watching hundreds of founders succeed in raising, and in watching dozens fail.

Here’s what to expect in this Alpaca Unpacked playbook: what you need before raising a Series A, how to time it, organizing a strategy, creating your pitch deck, and tapping the right investors.

This guide will not go into the closing of a Series A and the best practices on getting everyone aligned around the table (stay tuned for a future playbook on this).

What you need before raising a Series A

Before launching into pitch decks and outreach emails, you need to assess whether you and your company are ready to raise a Series A. At this point, your company should be at a more mature stage and there will have been clear development since your seed round.

Here are two quotes from our Partners on what they look for in companies raising a Series A:

“A Series A investor is wondering, ‘Why is this business working and if we pour gasoline on it, why is it going to scale the way we want?’ As a Seed company, you need good answers to this. You need to be in a position to convey product market fit with real data — whether that is data on retention, LTV:CAC, returns, attrition, networking effects, sales cycles, whatever — and that data should be repeatedly and impressively growing over time. You need outstanding metrics; metrics that jump off the page and show that growth has been unlocked. There is no formula for this, because every business is different, but it’s the entrepreneur’s job to paint the vision that the business is a rocket ship and needs more fuel.” — Aubrie Pagano, GP at Alpaca

“In the same way that an investor prioritizes founder-market fit, a founder needs to prioritize investor-founder fit, meaning ‘who’ you are pitching is equally if not more important than what or how you are pitching. It’s imperative to put in the work and to do the research as to which firms, and specifically which partner, has a point of view on a particular product or sector. We capture much of this in a database, and provide it to our founders pre-raise.” — David Goldberg, GP at Alpaca

Together these elements should easily demonstrate product market fit to your would-be investors and signal that your business is ready for long term success — provided you receive that necessary injection of capital.

Series A timing and timeline

A savvy business and a smart pitch won’t matter if the timing is off. You’ll need to give yourself ample time to put together all the pieces of the puzzle so you don’t find yourself scrambling before every VC meeting. For everything to come together without (major) stress, you’ll want to start the Series A process about...

Read the rest of this article at medium.com...

Thanks for this article excerpt to Alpaca VC. 

Photo by fauxels from Pexels

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