Where To Find Series A Investors: A Comprehensive Guide For Startups

Series A funding is the first major round of external funding that startups can raise. It is usually funded by private equity firms and venture capital firms. Startups can use the capital raised from Series A funding to continue to grow, funding things like product development and staffing. In return, Series A investors usually receive Series A preferred stock.

Series A funding is a critical stage in the funding of new companies. It can be the first series of stock issued after common stock and common stock options are issued to company founders, employees, friends, family, and angel investors. Series A investors typically purchase 10% to 30% of the company. The capital raised during Series A usually funds the company for 6 months to 2 years as it develops its products, performs initial marketing and branding, hires its initial employees, and undertakes other early-stage business operations.

Series A funding is typically in the millions of dollars, with a range of $2 million to $15 million. The average Series A funding round is $8.6 million.

Venture capital firms

Series A funding is a company's first significant round of venture capital financing. It is typically followed by Series B, C, and so on. Series A investors usually purchase 10% to 30% of the company.

Series A funding is a critical stage in the funding of new companies. The capital raised during this round is usually used to fund the company's operations for 6 months to 2 years as it develops its products, performs initial marketing and branding, hires its initial employees, and undertakes other early-stage business operations.

• Sequoia Capital
• IDG Capital
• Google Ventures
• Intel Capital
• Y Combinator
• SOSV
• Plug and Play Tech Center
• Index Ventures
• FJ Labs
• Insight Venture Partners
• First Round Capital
• Greylock Partners
• Venrock
• Qiming Venture Partners
• Redpoint Ventures
• True Ventures
• DCM
• Union Square Ventures
• Sapphire Ventures
• DCVC
• Trinity Ventures
• Shasta Ventures
• US Venture Partners
• BDC Venture Capital
• Spark Capital
• Mayfield
• RRE Ventures
• Ff Venture Capital
• Versant Ventures
• Matrix Partners
• Kima Ventures
• Kleiner Perkins

Private equity firms

Some of the largest private equity firms include:

• The Blackstone Group
• KKR & Co. (formerly Kohlberg Kravis Roberts & Co.)
• CVC Capital Partners
• The Carlyle Group
• Thoma Bravo
• EQT A.B.
• Vista Equity Partners
• TPG Capital
• Warburg Pincus LLC
• Neuberger Berman Group LLC

Private equity is a risky and controversial industry, with firms often engaging in large acquisitions and leveraged buyouts. However, it can also provide much-needed capital for companies to expand their operations and pursue long-term goals.

Angel investors

• Angel List: An online platform that helps business owners find investors.
• Angel Investment Network: An online network with over 279,000 investors. Business owners can create a profile and promote their business.
• LinkedIn: A professional social network that can give a direct way to contact an angel investor.
• Local business groups or schools: Local business schools or organisations may be able to put you in touch with an angel investor.

Angel investing is usually reserved for established businesses beyond the startup phase. These companies have shown promise for profits but still need capital to develop products or grow. Angel investors will want to see a business plan in place before they invest.

Equity crowdfunding

There are several equity crowdfunding platforms available, including:

• Onevest
• SeedInvest
• Follow
• NerdWallet
• Fundable
• Wefunder
• AngelList
• EquityNet
• CircleUp
• SeedInvest
• EnergyFunders
• PayPal
• Angel Studios
• StartEngine

Pros of Equity Crowdfunding

• Equity crowdfunding offers a business funding solution if you cannot qualify for sufficient financing elsewhere due to credit issues, revenue limitations, or other lender requirements needed to qualify for a business loan.
• There’s no debt to repay.
• By working with a larger number of investors, you might be able to raise more money.
• As a business owner, you can structure crowdfunding campaigns so that you retain the majority of your business equity and only offer a small portion to investors.
• You may be able to attract non-traditional investors to support your business goals.
• You can gain visibility and build excitement before you even launch your new business.

Cons of Equity Crowdfunding

• You give up a portion of your company’s future profits in exchange for cash now.
• Per SEC guidelines, you must disclose your company’s financial details to potential investors, and that means almost anyone can access that information.
• There’s a risk of public failure if your equity crowdfunding campaign isn’t successful.
• Equity crowdfunding platforms charge fees and may keep a percentage of the funds your business raises (often 5-15%) in the form of commission.
• Traditional investors likely won’t be interested because it can be tough to resell the shares of smaller companies without taking a financial loss.
• Crowdfunding campaigns may be time-consuming, and there’s no guarantee you’ll generate enough funding to make the time commitment worthwhile.

Seed funding

Seed capital is the money raised to begin developing an idea for a business or a new product. It covers the costs of creating a proposal, a business plan, and initial operating expenses such as rent, equipment, payroll, insurance, and research and development costs. It is often a relatively modest sum, raised from the founders, friends and family, and other personal sources.

After securing seed funding, startups may approach venture capitalists to obtain additional financing. Seed funding is followed by Series A, B, and C funding rounds, which are each separate fundraising occurrences.

A recent example of a company that has completed seed funding is Amlogenyx Inc., a subsidiary of Ultragenyx Pharmaceutical. Amlogenyx raised $14 million in seed funding, led by GordonMD® Global Investments LP. The company is developing novel gene therapies for Alzheimer's disease and other amyloid diseases.

Frequently asked questions