Saturday, May 28, 2022

How to Raise a Series A: 5 Tips and Tricks


The modern world gave us dating apps, social media, and instant communications. It’s convenient, but it destroyed the art of courting. The good news is that finding a startup investor keeps these traditions alive since it often has similarities with courting a possible lover.

Most experts agree with this comparison. As such, if you’re trying to raise your Series A in a startup funding, here are some tips and tricks you can use:

1. Choose the VC Wisely

Silicon Valley, as well as other similar locations, are home to thousands of VCs. This makes it harder for you to find an investor since they’re more difficult to narrow down. A small number of these are solo investors that made it big while others are professional companies with dedicated teams that handle their daily dealings with you.

Give the choice, which should you approach? Ask yourself the type of VC that fits your situation. Always keep your fledgling company’s interest in mind and you’ll narrow down the best choice.

Check out these 21 Most Active Early-Stage Investors in Los Angeles

2. Money Isn’t the Sole Driving Force

Most founders find themselves thinking that they’re succeeding when they raise lots of money. Of course, money is one of the primary things VCs bring to your startup. But the truth is that these investors can bring so much more.

One of the things you should watch out for is the wealth of experience they have. They know a lot about companies that did well as well as the mistakes the others did. As a founder, you’ll rarely have this knowledge even if you think you do.

Most VCs put their investments in various startups. Starting with them on a bad foot means they won’t be as gracious when you start struggling. If you want to give more investment, make sure to compel them with your brand story while spending the money wisely.

3. Always Do Your Research

Before approaching a VC, always do your utmost to find information about them. Look at Crunchbase and check their portfolio for the past companies they worked with. Try interviewing successful founders that got backing from the same VC to know how to deal with them.

Ask whether the VC prefers sticking to formal titles or informal with first names. Make sure to know whether they’re detail-oriented or prefer seeing the bigger picture. That way, you’ll know whether you’ll mesh well with them in the long run.

Try talking to founders with less successful startups after getting their funding. Ask them the VC’s behavior as a board member when their startup didn’t become the next unicorn. The more information you have about the VC, the easier it is for you to pick ones that work best with you.

4. Ask Whether the VC will have Time for You

A lot of VCs are serial backers, which can be a double-edged sword. It means their investments often succeed, which can have varying degrees. It’s also a sign that they have a trove of knowledge and experience to help you succeed more.

But with a successful VC, they often have little to no time for you. This isn’t a good thing since the most valuable resource a VC can bring is their business experience. That’s why it’s important to ensure that your VC has time to spend mentoring you to ensure your success.

5. Check How You’ll Work with Them After Raising the Series A

Once you succeed, it’s expected for you to have an ongoing relationship with your VC as a partner. It means you’ll need to think about the ways you’ll work together in the future. Think about the company’s structure after they invest and find ways to incentivize them even after the honeymoon phase of your project ends.

In most cases, VCs will want to be a part of your board. As a founder, you’ll most likely need to give someone else control over your project. That’s one of the hardest things to do, especially if they aren’t aligned with your company’s vision.

That’s why it’s always important to find a VC whose values align with yours. Otherwise, you might end up having a big fight in the boardroom. A bad split will most likely go public, and if the VC has a larger influence, you’ll most likely lose a lot in the long run.

Final Words

Finding a VC to raise your first major investment is a great feeling, especially if you courted dozens of them. But if don’t get it right, this feeling of euphoria will not last for a long time. Take note, these tips will give you a fighting chance, but luck will play a part regardless.

Regardless, following these can aid you in making the right choice for your company’s future. But if you need more tips, you’re welcome to read more of our posts and learn more today.

Seed vs. Series Funding Rounds: The Difference

LA STARTUPS is a digital lifestyle publication that covers the culture of startups and technology companies in Los Angeles. It is the go-to site for people who want to keep up with what matters in Los Angeles’ tech and startups from those who know the city best.


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