Getting to Series B
A Framework To Help Set Your
Company Up For Success
Jed Katz

Premise
• You’ve just raised Series A – Congrats!
• You have 18-24 months of cash
• You have major holes in your team and you
haven’t really established a culture yet
• You have barely started to show
product/market fit, much less prepare to scale
• A board has been set up, but hasn’t met yet
• There is a loud ticking sound
• You may not know it, but your Series B
fundraising effort has just begun

First and Foremost
ENJOY THE MOMENT!!!
OK, moment’s over.
Time to think about the Series B.

The Odds Are Against You
• Far more companies raise Series A than are able
to raise Series B
• The “Crunch” used to be Series A – now Series B
• Investors want removal of risk and proof of
scalability
• They want to see you can recruit well, build well,
and sell well
• Your job is to make the decision easy for them
before you run out of cash

Start With 12 Month Goals
• How long can you make your cash last?
• What is your brand, your “True North”?
• How do you want your board to operate?
• Who do you need to recruit, what’s the culture you want
to promote?
• Create an initial roadmap for both product development
and revenue creation
• What metrics will be most important?
• How can you show the likelihood of explosive growth?
• What additional strategic value can you demonstrate?
• How can you diminish key risk concerns?

Making Cash Last
• Find ways to save money
– Offer employees extra equity for less cash
– Use equity to pay for things like rent if possible
– Be frugal!
• Find ways to bring in cash faster
– Can some customers pay up front for a discount?
• Consider Venture Debt, but don’t plan on taking it!
– Try to get 12-18 month window to draw down debt
– Only take if you can service it and the extra runway is
essential

A Few Best Board Practices
• How do you want your board to operate?
– Create a collaborative board culture
– Figure out the value each member can deliver
• Antagonize them until they deliver it!
– Help everyone bond with each other
– Always talk about Series B
• How to get there, which funds they think should be following
the company, important metrics, etc
• What metrics are you NOT tracking well on?
– Discover how to access their big brains
– Avoid drama!

Recruiting and Culture
• Recruiting
– Hiring well early is absolutely crucial – Don’t settle!
– Create a presentation for new recruits
– Have them interview you too
– Imagine each exec pitching to Series B investors
• Culture
– Create a culture of speed, results, winning
• “Speed of Learning” is essential
– Be totally transparent with your team
– Demand feedback, listen carefully

Engineering & Sales Roadmaps
• Engineering AND Sales
– You need roadmaps for both
• A very common error is only doing one
– Iterate quickly and often
– Remove friction
– Create a realistic timeline and hiring plan
• Being over optimistic hurts a lot
• Assume it will take 6-12 months to find your top execs
– Did I mention the importance of scalability?

Metrics Are Important
• Metrics
– What are the KPIs to attract the next investor?
• CAC to LTV? Length of sales cycle? Churn?
• Land & expand? Downloads? Virality?
– How do you compare to the competition?
• Get to know them - study where you excel and fall short
• Never assume they’re dumb or slow
– Can you prove the size of the opportunity?
– Have you figured out “The Machine”?

Lowering Risk
• Ways to avoid investors getting scared off
– Have you shown you can recruit well and has your
team stuck together?
– Do you have referenceablecustomers?
– Is your churn low?
– Is your growth rate increasing or decreasing?
– Any glaring red flags (law suits, loss of key people,
falling behind development schedule, etc)?
– Are your current investors ready to invest more?

Other Key Things To Avoid
• Believing your own hype
– Echo Chambers
– Too much optimism or pessimism – be realistic
• Wasting money
• Bad hires
• Lack of focus
• Spending time with investors who will never get
to yes!!!

Choosing Which Funds To Engage
• Fund Size And Investment Amount Must Match
• Review their portfolio for relevancy and competitors
• You Can Identify Your Champion
• The Board Member Would Actually Be Helpful!
– Relevant Expertise in your space
– Not just as an advisor, but more as a constant brainstorm
partner
– A cultural fit
• They Will Truly Support You
• You’ll Be Meaningful To Their Fund

There are active investors who help a ton,
passive investors who never show up, and
distracting investors who waste your time.
Choose wisely.

Some Final Words Of Wisdom
Get in – and stay in - the Series B mindset

Some Final Words Of Wisdom
• Don’t wait until you have 3 months of cash left to focus
on Series B. Do it from the start, from the employees to
the board. Not running out of money should be your
new religion.
• Create a brand investors can believe in and a culture
they want to join
• Prove potential for explosive growth, creation of
strategic value
• Lower or eliminate risks where you can
• Form relationships early and keep them updated with
your progress
– The best companies raise their Series B relatively quickly
after than Series A

Questions?
Jed Katz
jed@javelinvp.com
@jedkatz