Series A Academy: 5 Key Takeaways

Series A Academy brings together investors and industry leaders for a series of online events to answer your questions live. For founders — this is a chance to get all fundraising-related questions answered.

Just 3 months ago, LAUNCHub Ventures started the public version of Series A Academy, our latest event series where we connect founders from Central and Southeast Europe with top-tier investors.

We aim to give entrepreneurs relevant insights and best practices on how to fundraise and reach the next step in their growth journey within and beyond regional boundaries. Join the next edition with Cem Sertoglu, Partner at Earlybird Venture Capital on Thursday, July 22nd, at 4:30 EEST/ 3:30 CET.

We’ve summarised the top 5 takeaways from the first 3 editions with Enis Hulli, General Partner at 500 Startups Istanbul, Oliver Holle, Managing Partner at Speedinvest, and Carlos E. Espinal, Managing Partner at Seedcamp.

#1 For Series A, startups need an established, scalable go-to-market strategy and fast growth

For the pre-seed and seed rounds, founders must show that they built a great team and can offer a product that is better than what the competition is offering — and at the caliber expected by customers at the global scale.

“In contrast, when it comes to Series A, first of all, you need to have established a scalable go-to-market strategy and enough repeatability on your business model. You basically need to show that at the end of this Series A round you will be able to amplify success — be it through scaling up the sales team or scaling up the unit economics,” Carlos Espinal (Partner, Seedcamp) explained.

From Oliver Holle (Partner, Speedinvest) we further learned that founders preparing for Series A should pay attention to how fast the business is growing. It is not so much about the traction the company has in terms of revenue, as it is about the speed with which the business is growing that determines whether it will raise a Series A. This is crucial when convincing a US investor that your growth story is better than other stories.

#2 Improve your pitching by paying attention to the way you present your product and connecting to the investor ecosystem

Among the many tips for improving your pitch deck shared by Oliver the first two focus on successfully presenting your product and connecting to the investor’s ecosystem.

First, Oliver stressed on the importance of having a simple, concise, and clear explanation of the product, the value it brings and the specific problem it solves. “Articulating reasons clearly is a skill that needs to be learned,” he noted. Top-tier investors are interested in partnering with founders who show confidence in their products.

Entrepreneurs should also proactively connect to the investor’s ecosystem. One way to get closer to investors is to build trust networks with their portfolio companies. Another great strategy is attending events in the tech ecosystem such as conferences, webinars, and workshops, where VCs often scout for good portfolio fits.

To that end, founders can also take advantage of the dynamics of online platforms, such as through online events, connecting with startup networks close to your target VC, or arranging online pitching sessions with investors.

#3 Investors are also looking for data metrics built around the momentum

When it comes to the metrics preferred by investors, Oliver advised founders to add KPIs and unit economics, which show the company’s current performance, rather than focusing on future growth alone.

“Don’t spend too much time on forecasts or revenue projections for the next couple of years, explain very clearly where you are, what is your annual and monthly runway, what are the core KPIs that you focus on,” Oliver explained.

As good practice, he mentioned replacing long reviews of metrics with brief updates on ongoing KPIs and the latest developments for investors.

Oliver also added that risk mitigation strategies can be overrated. “In the end, people will invest because they believe in the upsides of your company, not because you say you can mitigate the downsides.”

#4 US VCs are turning their attention to the European startup ecosystem

Carlos shared that US VCs are increasingly looking at the European startup ecosystem for potential investment. There are various reasons for this shift.

First, the pricing of US companies are forcing investors to search for better returns that they cannot achieve at home — and the European market looks promising.

Second, VCs have started to accept international investments as part of the new normal and as a new opportunity to find world-class fits for their portfolios. This mentality has developed along with generational changes and increased economic globalization, which led to a better interconnection between different markets.

Finally, the European startup ecosystem has gained more visibility overseas in recent years, due to an increasing number of success stories. One notable example is that of UiPath, the Romania-founded company that achieved one of the biggest IPOs for a software company on the New York Stock Exchange.

#5 In contrast to the US, European startups should be shooting for more stability and less risk

Enis Hulli, General Partner at 500 Startups Istanbul further distinguished between US and European startups. “Don’t burn money like there’s no tomorrow. That’s something that a Silicon Valley startup can do,” he advised European startups.

Enis added that the regional ecosystem should not focus on getting unicorns, but rather on building “cockroaches”, which take more time, yet are more stable and less risky businesses.

Drawing on his experience in the SEE and Turkey, Enis explained that it is tougher to raise a $5 to $10M round in the region because there is still a lot of uncertainty around the interest of VCs from Western Europe and the US.

Another key difference is that the market signal is crucial for US startups, whereas in SEE, you don’t need to succeed at raising capital from the first attempt. The best thing founders in the region should do at these stages is to keep their eyes on profitability. Even if you are not able to raise capital, if you can still break even, you can try again when the market is ready.

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