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How to Raise your Series A
1. How to Raise your Series A.
Notes from the event on November 29, 2018
2. Some high-level notes on our founder
event with panelists from Atomico,
Balderton Capital, Accel, Index Ventures
and Northzone.
*These are not firstminute capital views – these are summary notes from what panelists said.
4. • “Last two Series A investments we made we’d known the founders for 8 and 10 years
respectively!”;
• Warm intro is always better than a cold email;
• Use email updates as a tool to keep prospective investors in the loop. Make the investor feel
that this is personalised or exclusive;
• Call people out in newsletters, people like to see their names up in lights
• Be careful not to overdo chasing the VCs before you officially raise – easy to do this. E.g.
attending lots of conferences without clear aims can make investors question your focus as a
CEO;
• Pick your seed investors cautiously as all will have a reputation with Series A investors,
whether positive or negative. Reference seed investors with Series A funds.
Part I:
Relationship Building with Series A funds
6. • Captable:
• More than 20-30 investors on cap table at Series A is a yellow flag – make sure you have a clear reason;
• Make sure key people (execs) are incentivised with equity going into your raise;
• To be safe, start your series A round when you have 9+ months of runway;
• If a series-A investor pre-empts (pitches to you before you start your round) be upfront
with yourself and them about an acceptable price and % you envisage selling;
• Bridge vs Series A: If you want to do a bridge, be clear what you are bridging to. If you
can explain the milestone you needed the bridge for then it can be seen positively by
Series A funds;
• Don’t worry about not having hired senior execs before a Series A (e.g. Sales VP). -
Series A investors understand exec talent is often too expensive for pre-Series A
companies. However, investors love to see evidence that you are good at hiring.
Part II:
Gearing up to Raise
8. • Ideally, founders shouldn’t go below 15% ownership post-Series A;
• Most Series A funds target 15-20% initial ownership;
• Momentum:
• Powerful tool for founders to speed up process;
• However, not an excuse to run a bad process. Well run process can help founders by;
• Providing the founder with more options and greater leverage in negotiation;
• Will reduce disruption to the founders’ business during the raise;
• Too much pressure on VCs can lead them to dropping a deal because they can’t keep up and have too many other deals on their plate;
• Metrics: Revenues are not the key issue. Many other factors are important like moat, churn, customer engagement, product
market fit, reproducible sales playbook;
• Vision: Selling the long term vision? Walk in showing what the product will achieve over the next 2 years with various "value
inflection points" that will be reached;
• Call referees before accepting a deal. Reach out to them cold. Stress how the A-series firm performs in negative situations;
• EU founders raising in the US: fundraise from US funds when you already have some significant presence there (sales office or
clients), otherwise it's a long shot.
Part III:
Investment Process