How to: prepare for Series A

Jack Preece, July 8, 2019 2 min read

Series A is where you build a sustainable, scalable business. The expectations that come with this stage are very different from Seed. Here’s what you need to know when preparing for raising – in 6 steps:

Not ready to raise your Series A yet? Our Digital Business Academy offers free online courses to help you raise your first investment >

How long does it usually take to raise? 

Series A usually takes 8-12 months to raise and can cost around £10k in legal fees. 

The road to Series A

Step 1: Write a business plan

Write a business plan with a financial forecast that’s grounded in your performance to date. 

Then get someone to double-check the numbers. It can be other startup founders, existing investors or even a hired accountant. Just make sure you create the forecast yourself.

Step 2: Identify suitable investors

Identify the investors who:

  • Invest at your stage
  • Invest in your kind of company or industry
  • Have funds available to invest

Not sure where to find them? The Data Commons has over 8,000 UK based investors to filter.

Step 3: Get paperwork in order

Make sure all the legal papers are in order:

  • Company registrations and corporate structure
  • Paperwork associated with IP
  • Company liabilities
  • Share ownership
  • Regulatory compliance

You’ll need them and other documents for investor due diligence.

Step 4: Reach out to investors

Reach out to investors with an executive summary of your business and arrange the initial meetings.

Cold emails with persistent follow-up can still work. However, you’re much better off asking for warm introductions or tapping into the investor network you should have created by this point.

“You wouldn’t believe the number of clearly generic emails we get. If a pitch has an unsubscribe button at the bottom, I’m hitting unsubscribe.” – Tom Hulme, General Partner at GV said this at Startup Grind Europe. The point here being, don’t use mailchimp or mailmerge, at least tailor each one.

Step 5: Narrow down the list

Narrow down the list of investors you want to take forward.

Select at least two so you have the leverage to negotiate the business valuation and other terms, keep your options open until you get their term sheets to compare.

Step 6: Engage lawyers

Engage specialised venture capital lawyers if you haven’t already. You’ll need their expertise to:

  • Agree business valuation
  • Negotiate investment terms and prepare a term sheet
  • Draw up contracts

SeedLegals, a Rising Stars winner offers a product that can help with all of the above. 

Bottom line: Series A is about building a scalable business for the first time. You’ll need to show evidence that you’re up for the task and that you have huge growth potential that returns a whole funds capital. 

Growth, Investment, Digital Business Academy, Early Stage, Mid Stage