September Innovation Capsule: Series A Funding — How to Get Started

By Julie Jung & Prerna Agarwal

For anyone who is attempting to launch their idea into an operational business, Series A Funding is an essential step in the startup process. So what is it exactly?

Series A funding is a round of funding that startups go through when raising funds in the early stages of their venture. It is a startup’s first significant round of funding from venture capital investors, intended to provide enough capital to make the company profitable over the next two years. Through the Series A round of funding, a business can really start to grow its revenue and solidify its position in the market.

Before applying, startups may want to achieve a product-market fit, create a demonstrable monetization model and an effective consumer acquisition strategy, and be poised to scale.

1. Locate your Venture Capital Investors

A simple search on Google may be the best approach sometimes. It is imperative that an entrepreneur is able to locate a wide mix of venture capitalists that are interested in their startup industry. This way, their chances of getting an investment or even recognition can be increased. Even if a particular venture capitalist is not interested in a company at the given moment, they can still connect you to other potential VCs.

2. Prepare the perfect Elevator Pitch

Most entrepreneurs cannot simply cold call big investors and expect great offers. Careful planning and patience is key. Every startup also needs an “Executive Summary” or “Elevator Pitch”. Delivered by entrepreneurs to investors, this 30–45 second pitch captures the essence of the company and lures investment decisions.

3. Show you are trustworthy investment

After the introduction and review of a pitch, investors may contact your company. The conversation between the two parties will help decide whether the investment will be pursued. It is imperative when talking to the VC to have a diverse support system of team members well-versed with every part of the company. For instance, if there isn’t an appointed ‘bookkeeper’ or finance employee working full time at the start-up, it can cause VCs and other investors to question what the startup may do with the investment.

Through careful planning, networking, and execution, your startup might be the next big thing!

References: Investopedia: Series A Financing Definition

At HKEC, we’re all about igniting world changing ideas and preparing UT Austin student founders with the tools for startup success. herbkellehercenter.com