The Ultimate Guide To Series B Funding

Written by Dave Lavinsky

Startup Founder Seed Money & Series Funding

So you’ve just raised initial seed capital funding and Series A funding for your startup and are now looking to secure Series B and new investors. But where do you start? What are the considerations for Series B financing and how do they differ from Series A or the seed funding round? How do you go about finding Series B venture capitalist investors? And what happens once you’ve secured the new investors funding?

This article will provide a comprehensive guide to everything about Series B funding, from what it is, to when you should consider it, to how to successfully raise capital in the early stages of your business. We’ll also cover FAQs so that you have all the information you need right at your fingertips.

 

What Is Series B Financing?

Series B is a series of funding that startups in the development stage use to continue growing their established business. This type of funding typically comes after Series A, and it is used as a cash injection to help startups expand their operations, improve market research, hire more staff, and scale their business after successful seed funding round and series A funding.

Series B can be raised from a variety of sources, including venture capitalists, and other investors. The amount of money raised in Series B financing rounds can vary widely, but it is typically more than the amount raised in Series A.

Many companies receive anywhere from $5 million to $50 million during Series B financing. However, the average is closer to the $7 million to $10 million range. 

 

When Should You Consider Series B Financing?

You should consider Series B funding when you have a proven product or service with a solid customer base. This is typically 18-24 months after Series A funding. At this point, you should have a good idea of your business strategy and how you plan to scale your company.

Series rounds of financing are also a good option if you need more money to continue growing your business. This could be because you’re expanding into additional markets or increasing your marketing efforts.

 

Considerations For Series B Financing

Before you start raising capital, there are a few things to keep in mind.

Know Your Business Model 

Before you start pitching to investors, you need to have a solid understanding of your business plan and how it will generate revenue. This is essential in Series B funding because investors will want to know how you plan on making money.

Have a Proven Product 

In order to get Series B funding, you need to have a product or service that is already being used by customers. This shows investors that your business is viable and has the potential for growth.

Have a Solid Team 

It’s important to have a team of your business leaders in place that can execute your vision. This includes managers, engineers, designers, and marketing experts. Having a strong team will give investors confidence in your ability to grow your business.

Growth Plan

When you’re raising Series B funding, investors will want to see a clear plan for how you plan on growing your business. This could include expanding into different markets, increasing your marketing efforts, or hiring more staff.
 

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Finding Series B Investors

When looking for Series B financing, you want to look for potential investors who are a good fit for your company but maybe missed out on the seed round or series A funding stage. This means they understand your business venture and have a track record of investing in similar companies.

There are a few types of investors that you can look for:

Venture Capitalists

Venture capital is a type of financing that provides companies with the money they need to grow and expand.  Venture capitalists are investors who provide this type of financing, and they typically invest in companies that have a high potential for growth. In exchange for their investment, venture capitalists typically receive a percentage of the company’s equity stake, which gives them a stake in the business.

Angel Investors 

Angel investors are individuals who invest their own money in startups. They typically have a personal connection to the entrepreneur and are more willing to take risks.

Private Equity Firms 

investment firms that invest in companies that are later in their development. They typically invest larger sums of money and have a more hands-on approach with the companies they invest in.

Hedge Funds

A hedge fund is a type of investment fund that pools together money from a number of investors. These investors are typically high net worth individuals or institutional investors, such as pension funds or university endowments. The hedge fund manager then uses this money to invest in a variety of different assets, such as stocks, bonds, commodities, and currencies.

Investment Banks

An investment bank is a type of financial institution that assists clients in raising capital by underwriting and issuing securities. They also provide a variety of other services, such as market making, mergers and acquisitions advice, and consulting.

To find these types of investors, you can use online resources, such as Crunchbase and VentureDeal, or you can attend startup events.

 

Creating & Setting Up Your Pitch To Series B Investors

When creating a series B pitch deck, you’ll want to focus on how your company has grown and what you’ve accomplished since your previous rounds of funding. Additionally, you’ll want to highlight how you plan to use the additional funding to grow even further. investor will want to know that their money is being put to good use, so be sure to outline your business plan and strategies for growth in detail. Finally, make sure to include graphs and statistics that support your claims and illustrate the potential for success.

Your series b pitch deck should include:

  1. Company Summary: A brief overview of your company and the problem you are solving. This should include your mission statement, your target market, and your competitive landscape
  2. Business Model: You need to explain how you plan on generating revenue and how you will scale your business. This should include details about your product or service, including its features and benefits
  3. The Leadership Team:  Investors will want to know who is on your team and what their experience is. This will show them that you have the right people in place to execute your vision. Information about your team, including bios of key team members should be included here. 
  4. Your Financials: You should include your current financial situation and your projections for the future. This will show investors how much money you need and how you plan on using it. Financial information, including your current traction and forecasted growth.
  5. The Growth Plan: Your growth plan: You need to have a clear plan for how you will grow your business. This could include expanding into varying markets, your competitive landscape or increasing your marketing efforts.
  6. A Call to Action: This should be a slide that invites investors to learn more about your company and invest in your Series B round.

 

How To Successfully Secure Series B Funding

Now that you have your pitch deck, here are some tips to successfully secure Series B funding:

  • Do your research: Before you start pitching to investors, you need to do your research. This means understanding the investor’s portfolio, their investment strategy, and what they’re looking for in a company. This will help you tailor your pitch and improve your chances of getting funded.
  • Build a relationship: Before you ask for money, you need to build a relationship with the investor. This means getting to know them and their interests. The more you know about the investor, the better your chances of getting funded.
  • Be prepared: When you’re pitching to investors, you need to be prepared. This means having a well-thought-out pitch and being able to answer any questions that they might have.
  • Rehearse Your Pitch: Before you meet with investors, you should rehearse your pitch. This will help you ensure that you’re delivering your pitch in the most effective way possible.
  • Follow Up: After you’ve pitched to an investor, you should follow up. This shows that you’re interested in working with them and that you’re serious about getting funded.
  • Be persistent: Don’t give up if you don’t get funded right away. It takes time to secure funding, so you need to be patient and persistent. Keep pitching your company to investors and eventually, you’ll find the right fit.

 

Next Stage Funding Rounds

Once you’ve secured Series B funding, you can start thinking about other series of funding rounds. The most common are Series C and Series D.

Series C funding is typically used to scale your business. This is when you’re focused on growing your company and expanding into existing markets.

Series D funding is typically used to take your company public. This is when you’re ready to sell shares of your company to the public.

Series B funding is a type of equity financing that is typically used to scale your business. If you’re looking for Series B funding, you need to find investors who are willing to invest in your company. You also need to create a pitch deck that outlines your business plan and how you plan on growing your company. To improve your chances of getting funded, you should do your research, build a relationship with the investor, and be prepared for your pitch.

 

Series B Funding FAQs

Series B funding is a type of equity financing that is typically used to scale your business.

You should consider Series B when you're ready to scale your business. This could include expanding into new markets or increasing your marketing efforts.

Series B funding is typically used to scale your business. This is when you're focused on growing your company and expanding into additional markets.

You can find Series B investors by networking with other entrepreneurs, attending investor events, or by reaching out to venture capital firms.

The amount of money that is included in Series B varies depending on the company. However, it is typically a larger amount than what was raised in series A.


 

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