Raising Series A Funding: Part one

Looking for the pot of gold at the end of the rainbow? Whether you are actively speaking to investors or planting seeds for an upcoming round, this blog will provide you with the ins and outs of fundraising, directly from people who have done it and lived to tell the tale. 

We had a chat with Pierre Paslier, Maya Pindeus and Amrit Chandan, three Enterprise Hub Members who recently raised and successfully closed a Series A funding round (woohoo!).  Keep an eye out for part two, filled with more advice from our Hub Members and Five Top Tips by Jo Slota-Newson Principal at IQ Capital, to understand what boxes an investor hopes you’ll tick before and during your raise.  

Maturity and timing is everything  

Congratulations, the hard work you’ve put into your business has paid off and a Series A investment opportunity is on the horizon, but how do you know when the time is right? When we put this question to our trusted Hub Members, two things became clear:  

1. Raising Series A normally means that a certain level of maturity has been reached within the company and you have a clearer idea of what you can offer investors and your customers;  
2. Timing! Make sure you have enough runway when you start to fundraise and keep an eye on the market as you want to make sure potential investors are open to conversation.   

Finding the right investor: a matchmaking saga 

Finding the right investor is not only about finding the right amount of funding, but also an opportunity to find the right partner that will help you elevate your business. This involves making sure your values are aligned on the vision of your company. Examples can cover, but not be limited to: 

• Appreciating what you have built and achieved 
• Sharing the same views on sustainability and/or diversity and inclusion practices. 
• A commitment to understanding your business and technology  
• Working towards a common goal and exit strategy 
• The relevance of their existing portfolio 
• Most importantly - that you get along with the investment team. You’re going to be in it for the long haul, so the chemistry needs to be right.  

Now that you know what to look for, where do you find them? Our three Hub Members all emphasised the value of utilising existing investors’ networks. Warm introductions by investors or corporate lawyers from your pre-seed or seed rounds are excellent, and make sure to nurture those contacts that you made when the timing or stage wasn’t quite right – you never know when they might come in handy. Make the most of networking opportunities such as pitching events or university alumni showcases as you never know who you may meet. Similarly, industry specific organisations or groups can be a very helpful way to meet relevant contacts and investors. And last but by no means least, the Enterprise Hub can provide you connections to a wide network of investors and industry experts including our Fellowship, we are always more than happy to tap into it for you! 

“Good fortune is what happens when opportunity meets with planning” – Thomas Edison 

If the pandemic has taught us anything, it’s that we can never quite predict what awaits around the corner. In investment terms, this translates into:

• Always making sure you plan your fundraising timeline on the side of caution and;  
• Giving yourself enough runway to fall back on in case there are roadblocks or delays.  

Even the most promising conversations can take six to eight months before you see any money in the bank. Our Hub Members suggest: 

• Initiating conversations with multiple investors simultaneously – should one deal fall through you won’t have to start all over again. 
• Factoring in the time of year with your plans. Closing in summer and in December can be challenging and may create delays – yes, even investors go on holiday. 
• Knowing what you have achieved so far and what you will achieve with the money you are raising – planning truly is your best friend. 

Creating a compelling narrative 

When it comes to telling your story and creating a narrative that will convince investors to take a chance on you and your business, practice makes perfect.  

• Practice your pitch to anyone who will listen and be open to constructive criticism. Your internal team is your first stop, but don’t overlook your advisory board and existing investors - they provide an outsider’s perspective with insider knowledge.  
• Make sure your pitch is up to date - a lot of progress and changes are bound to have taken place since you last fundraised. Use this to create a pitch based on a track record of successes.   
• Don’t compromise on the complexity of your technology, but make sure it’s understandable to the investors. 
• Develop a high impact narrative by answering ‘why am I doing what I am doing?’. Challenge yourself to capture the ‘essence’ of your business in one minute or less. Create excitement and enthusiasm you can build on. 

Make sure to read part two to learn more!