On – 26 Apr, 2017
Another staff pick, check out this article by James Giancotti, share your thoughts in the comments below.
This Is How I Raised $6M In Series A Funding For Our Hong Kong Based Startup
I am the CEO and co-founder of Oddup, and I can say today is a good day. After months of work, we announce our Series A. Our host of awesome investors range from Times of India, 500 Startups, Moneta Ventures and Click Ventures, to our loyal first round investors. We are thrilled to have raised in what has been a difficult time in venture capital in 2017. So rather than talk about all the investors, growth and traction, I wanted to let you know as an entrepreneur how we did it, and things you need to have ready for these discussions. One of the most commonly asked questions by entrepreneurs is how should I raise money?
What is a Series A?
Series A investment is typically between $3-10 million, and roughly only 1/3 of seed-invested companies go on to raise Series A. It’s harder to raise after every round, but as you grow in the right way, this becomes much easier for you. The market is flooded with seed capital, typically cheque sizes from $25,000-$200,000 for rounds up to $2 million. If you are able to raise Series A, investors who didn’t want to risk investing in the earlier stages with you will be keen to restart the conversation post-Series A.
Look at your business before looking for investors.
Most venture capital firms will want to see traction. If you are pre-revenue, then you have hundreds of thousands of users and need to scale. Decide how much the business needs to get to its next stage of growth. Look at your current numbers and determine how much you need for the next 18-24 months to scale for the growth.
Be Series A ready before you begin
The next thing is to get your house in order for a funding event. All measurements of your traction, growth and revenue get them ready. Get your financials in order, and importantly hire a good lawyer to help with drafting documentation. I cannot stress the importance of having the right legal representation with your business.
Get your mind set on the potential team
Oddup isn’t just a few people, it’s a growing business. Get your mind focused on the needs of a growing company. Unlike raising at seed stage, investors are more concerned with the growth of the business. Investors need to understand how your business is going to survive and rapidly grow in the coming years. Series A is about growing the business to be a global icon and part of that growth is hiring and getting support to help the initial team build an even better team.