DIGITAL MARKETING INSIGHTS

The Australian Startup Guide to Series A Funding

What is Series A Funding For Startups?

After a startup has gone through a Seed Funding round and developed its business model they can proceed to the Series A round. At this stage, the startup should have a business development plan, even if they haven’t proven that their business model works yet. During this round, entrepreneurs should be able to show investors how they have taken their seed money and used it to increase the value of the company.

How much money can startups raise with Series A Funding?

A startup can generate between $1 million to $15 million while fundraising in Series A. However, to invest this much capital, investors will look for the company valuation to be at least about $10 million to $15 million.

The investment that companies receive in a Series A funding round is significantly more than the Seed Funding round because there will be more substance in the company by the time it gets to this round. Founders have to show more significant commitment and effort to acquire Series A funds.

What are the sources of Series A Funding for Startups?

The most common source of funding for Series A is Venture capital firms. However, there are many angel investors who also provide investment to startups at this stage. Equity crowdfunding is also a great option for raising funds for Series A rounds and is becoming increasingly popular.

We consider Series A rounds to be very crucial for startups as it gives them the biggest boost in funds to take the company from an idea to reality. However, it is prudent for founders to be aware that Series A rounds can also be a point where many startups fail as they cannot secure the funds needed. This can happen even if the company has been successful in the Seed Funding round. This phenomenon is known as a ‘Series A crunch.’

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