Practical advice for B2B startups raising a Series A

As the fintech market is gradually recovering from the turmoil of 2022, funding is expected to increase. Moreover, projects peg the fintech industry to reach $1.5 trillion by 2030, so the market saturation will only keep growing, leading to heightened competition for investor attention.

In conditions where many companies struggle to establish themselves amid limited funding opportunities, completing even a Series A round is a powerful symbol of your fintech project’s promise.

As a founder of a global B2B payment infrastructure company that raised funds in different market periods and successfully endured the previous year’s challenges, I want to share some of the techniques that helped us in our efforts to secure funding and stay afloat.

To succeed, you must present a reason to buy it

Preliminary research needs to be as thorough as possible. You must understand the exact manner of products you create, what market niche you are attempting to cover, who your key clients are, and how to reach them. When you have a tangible understanding of product-market fit, you can define what differentiates you from competitors and what value the product offers to potential investors.

Not only that, but you also need to showcase sensible traction, with clear indicators of the startup’s growth so far and how securing new funding would influence its development in the future. Growth tendencies should show the revenue output increasing at least twice a year. Present a specific request when attempting to raise funds through a round. The amount and the goals should be straightforward to the investors. Cohesively explain why you need $10 million (as an example), how long, and how you’ll achieve results during the indicated period. A concrete plan of action serves to inspire confidence.

Business budgeting is essential. It is always better to showcase a growth forecast with a graph that goes up sustainably from quarter to quarter. If the growth line is jagged, this risks might scare off investors, who will likely think your project is too unstable for investment. Make sure the predictions are precise and not artificially bloated to look good. Doing anything less would undermine the trust of your investors.

Set up a data room as an instrument to keep investors updated

Transparency is critical when preparing for fundraising — investors should be able to readily access all the pertinent information regarding your business. This list includes sales cycles, customer onboarding and management stages from your CRM, traction for previous periods, etc.

I recommend creating a data room as a centralized repository for this information, ensuring potential investors understand the business comprehensively.

Early-stage companies carry with them a lot of performance risks. A well-organized data room not only demonstrates credibility but also facilitates efficient due diligence, enabling investors to make their audit of the company’s activities and commitments. Being well-informed would put them at greater ease about supporting your business financially.

Put together a solid management team before launching the round

When embarking on a Series A fundraising round, having a well-established management team is crucial for boosting the attractiveness to investors. Competent leadership plays a significant role in instilling confidence and trust in the project. Investors are keen to evaluate the capabilities and track record of the management team as they recognize that the people driving the project are ultimately responsible for delivering the promised results.

A strong management team with a previously known history demonstrates a combination of expertise and a proven ability to navigate challenges. Remember — these people are the face of your business. Investors want to see leaders who possess the necessary skills to make decisions that drive the company toward growth and bring in profit.

Therefore, it is a good idea to put effort into boosting the company’s team by hiring experts with diverse backgrounds and complementary skill sets before fundraising. This step provides additional assurance that your project is equipped to handle various challenges and can deliver on the promise that you offer.

Prepare yourself for negotiations

Fellow founders, let me say it straight: We are directly responsible for the success of a fundraising round. Preparing for negotiations with investors is essential, as everything will ride on this step. All the effort into showcasing the business’s attractiveness comes down to how well you can sell it.

I recommend that you train in advance to prepare yourself mentally. The more thorough your preparations are, the better. And, of course, you must build a pitch deck based on a deep understanding of your company and its strong points.

Also, stay one step ahead — anticipate potential challenges and uncomfortable questions that could arise, and prepare your responses to address these questions confidently. The ability to reach a satisfactory agreement will depend on your charisma almost as much as on the complex business data. Treat negotiations as practically a full-time job.

There will be a long list of investors for you to work through, including primary targets and several extra candidates. Study the VCs’ portfolios, choose the ones that fit the product the most, send out personalized letters (often 10 to 15 per day), and plan face-to-face meetings with them in the coming weeks. All of this is a time-consuming and exhausting process.

You will also hear many nos from potential investors during negotiations. Many of them will challenge both the ideas and their execution. This process can be stressful, so be prepared to bear this burden without letting it dampen your spirit.

Above all, maintain faith in what you are doing. Your startup is worth the work.