series a financing funding round investment

Step-by-Step Series A Funding Prep Guide: Financial Documents & Services Needed

What is Series A Funding?

A Series A funding round is the name that is typically given for a company’s first significant round of venture capital financing and the second stage of startup financing.  The name refers to the class of preferred stock sold to investors in exchange for their investment.

Just like seed funding, Series A financing is a type of equity-based financing meaning that a company secures the capital from investors by selling the company’s shares. However, this funding can come with anti-dilution provisions to shield investors from their investment potentially losing value and voting rights.

Not every company needs to raise Series A, but if a company wants to raise significant funds from a VC, then it will be beneficial to know how to be prepared. At this point in the business lifecycle, companies have already raised a sum of money from the pre-seed and seed rounds, it is now time for larger investors to step in.

What Are The Objectives of Series A Financing?

The main purpose of a Series A funding round is to provide the means to take a business to the next level of growth and development to set them up for success.  As many founders have succeeded in raising Series A, many others have failed.

The common objectives in this round are to reach goals in product development and attract new talent in anticipation of growing the team. In this stage, a company expects to continue the growth of its business to attract investors for future larger rounds of funding that believe in and see the vision of the business.  The rule of thumb here is that capital is provided to companies that already generate revenues but are still in that pre-profit stage.

What Are The Prerequisites?

It is important that the business is generating at least $100,000 a month in revenue by the time you are looking to start raising your Series A round of funding. Ideally, you should be on track to grow 3 times year over year because investors will not be up for unsustainable growth.

One of the most important things that you need to get across to investors is the explanation of the market size and the opportunity within that market. Research must be done, and findings should be accurately addressed in the pitch deck.

The valuation of a start-up is also an essential part of Series A financing. Since it is beyond the seed stage, companies are able to provide more information used to make educated investment decisions.

What Financial Documents Will Be Needed?

  • Pre-Funding Prep
  • Capital Raise Roadmap (next 5 years)
  • Product Development Roadmap (next 5 years)
  • Business Valuation
  • Financial Projections (next 5 years)
  • Cash Balance
  • Financial Statements (last 3 years)
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Signed/dated by independent auditor.
  • Financial Models (current/previous yr.)
  • Cost to Acquire Customer (CAC)
  • Customer Lifetime Value (LTV)
  • Customer Churn Rate

Pitch Prep          

  • Pitch deck (10-12 slides)
  • Transaction Proposal (12+ slides)
  • Funding / Transaction Due Diligence

Funding / Closing            

  • Post-money Equity Allocation
  • Valuation
  • Liquidation Preference
  • Anti-dilution
  • Investors Rights Agreement
  • Investor Rights Agreement
  • Right of First Refusal
  • Participation Rights
  • Corporate Governance
  • Information Rights
  • Stock Purchase Agreement
  • Share price
  • Number of shares
  • Dispute resolution provisions
  • Agreement on compensation for unforeseen costs related to fundraising.
  • Regulations & Outcomes regarding transfer of shares
  • Representation & Warranties
  • Burn Rate Analysis (6 month/12 month/24 month)
  • Waterfall Chart / Waterfall Analysis
  • Investor Reports
  • Post-Money Valuation / Post-Closing Valuation

How NOW CFO Can Help

As you can see, there is a large number of financial documents and services that will be needed in order to obtain a Series A funding round. It will become increasingly apparent that a CFO will be needed to guide you through these preparation services. NOW CFO has years of expertise guiding companies through these processes and rounds of funding throughout the business lifecycle.

Get Your Free Consultation

Gain Financial Visibility Into Your Business

We provide outsourced, fractional, and temporary CFO, Controller, and operational Accounting services that suit the needs of your business.

  • Hourly Rates
  • No Hidden Fees
  • No Long Term Requirements

NOW CFO provides the highest level of expertise in finance and operational accounting to accelerate results and achieve strategic objectives for sustainable growth and success.

After completing the form, a NOW CFO Account Executive will reach out and learn more about your needs so that we can pair you with the right Partner.

Share this post


Why You Need Internal Controls in Your Business

Why You Need Internal Controls in Your Business

Internal controls are essential mechanisms, procedures, and measures organizations implement to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.  Internal controls serve as the first line of defense in safeguarding assets and optimizing operational efficiency.

Outsourcing Your Accounting For Success 

Outsourcing Your Accounting For Success 

In today's competitive business environment, the strategic decision to engage in outsourced accounting can significantly influence a company's trajectory toward success. By partnering with external accounting professionals, businesses can leverage specialized expertise, streamline operations, and focus more intently on their core competencies.

The Mid-Year Financial Review: How to Conduct One and Why it’s Important 

The Mid-Year Financial Review: How to Conduct One and Why it’s Important 

In our journey toward financial well-being, conducting a mid-year financial review is akin to pausing for a compass check during a hike. This process reveals where we currently stand and reorients us towards our ultimate financial destinations.


Contact Us

    1000 character limit