Your startup’s Series A funding round can be an exciting, demanding, tough and ultimately rewarding experience. With the funds raised, your startup is able to accomplish so much more, such as scaling up its operations. Raising your company’s first ever venture capital funds, finding the lead investors, handling the constant back-and-forth meetings and communications; all of this can be an altogether positive fundraising learning experience for you to better prepare for your startup’s eventual Series B and other successive funding rounds. Here are some insights that can raise your fundraising game and give your Series A funding round process a boost.
The fundraising process may seem like a sales process, and for most cases it is. Just like in sales where you need to identify a target market, you should do some research to see which investors are going to be the most suitable ones for your startup’s Series A funding round. Not only should the investor be the right fit for the stage that your startup is currently at, the investor should also be one that you feel comfortable working with. Most investors usually supply information about their funding practices on their websites, so you can go directly after those who are keen on early-stage growth rounds instead of spending precious time going after investors who are mainly interested in only late-stage growth rounds. Make finding a strong lead investor for your Series A round the top priority; they become invaluable partners and contribute their time and expertise to ensure that your round is closed successfully while also determining the terms for investors’ participation in your funding round.
At the Series A funding round stage, you may be very focused on going after venture funds for raising capital. Still, there are sources other than venture capital (VC) funds that you can go after for venture capital; high networth individuals, family offices and even c-suite executives at large companies and organizations can turn out to be great investors for your startup’s first significant round of venture capital financing. What’s more, you can leverage their experience and network to further grow and develop your startup.
When reaching out to potential investors most startups and companies will use time-tested warm intro methods, and a lot of them have been successful at it. However, what a lot of people overlook is that a well-prepared cold approach can also do wonders. While it certainly may not be as easy as the warm approach and can seem daunting, sending out cold outreaches to people and organizations that have no prior relationship with you or your startup gives you access to a much larger pool of potential investors. In this day and age, this approach can be accomplished even on social media platforms like Twitter and Facebook, besides the more traditional cold calls and cold emails. As always, doing the necessary homework such as researching and understanding the targets you want to reach out to will boost your chances of success.
A series A funding round can be a very important opportunity for your new startup to gain crucial financial support and raise much-needed capital. However, do remember that fundraising is ultimately not the end goal of your startup, but a means for you to achieve a goal – and that goal is to build a sustainable, working business for your startup.