SoCal Venture Pipeline’s 3 Takeaways for Founders Seeking Series A Funding
Over the last few months we’ve reviewed nearly 70 startups applying to be accepted into our SoCal Venture Pipeline brought to you by Silicon Valley Bank. Most have been very promising ventures but we’ve seen three common missteps that, if avoided, would improve their chances of getting accepted into the program and on their way to raising their Series A round.
First of all, let’s be clear: funding at this stage means demonstrating meaningful traction around customer acquisition and proving out the revenue model. If you cannot yet demonstrate that traction, you may still be a great company, but perhaps better suited to an earlier stage of investment such as seed or angel/pre-seed.
Here are 3 key takeaways for founders who are considering Series A investment:
- Demonstrate your company’s financial & customer growth
The biggest indicator that your company is ready for their Series A round is growth. Serious growth where the company is at that crucial inflection point where the charts point up and to the right. This means having a repeatable business model, customers, and/or revenue. This should be captured on a slide or two you submit to this program and investors.
Don’t have revenue? That might be okay in some industries, like consumer product businesses where revenue follows customer acquisition. You’ll need to show a growing customer base and have a clear path forward to monetization. Clearly showcase your financial and customer traction in your pitch deck, it’s imperative.
- Call out your achievements
What key milestones have you achieved? Highlight these achievements, whether it be $1 million annual recurring revenue (ARR), a huge contract with a large corporation, government regulation approval, making a key hire, etc. Show us the exciting milestones that you’ve hit.
- Be honest
As a founder, make sure you always tell the truth. Investors and trusted advisors know you’re selling the dream and understand that you haven’t figured it all out yet. When fundraising, nothing can hurt you more than being untruthful and getting caught. This often leads to an irreparable erosion of trust and investors will naturally question what else might not be true about your company.
If you are ready to raise your Series A round, we encourage you to apply. If you’d like to learn more about the program and the investors and startup leaders who are involved come check out our upcoming Breaking the Series A Barrier: What Investors Look For on October 12th at 2pm. If you’d like to speak with somebody directly, reach out to Raychel Espiritu
About the SoCal Venture Pipeline Program
The SoCal Venture Pipeline brought to you by Silicon Valley Bank is a program developed by The Alliance for SoCal Innovation that helps founders with their Series A raise by facilitating warm intros to VCs.
The Alliance is a non-profit organization, so we do not charge any fees or take any equity. The SoCal Venture Pipeline program is funded by Silicon Valley Bank, Wilson Sonsini and KPPB as a way to directly help founders access capital, and in the process, elevate the SoCal innovation ecosystem. The program leverages our operating partner’s proven track record of providing venture matching to San Diego’s most promising startups. Connect, since 2015 has helped attract $650M+ in Series A investment from a national VC syndication network with 400+ funds.
Once accepted into the program, we facilitate strategic introductions to nationwide VCs that write +$4m Series A checks. In the process, we are helping founders bridge from the local pre-seed and seed rounds to growth capital rounds, which can still be hard to access locally in SoCal.