Startups are joining rarified and thrilling territory regarding extending a Series C round. In 2020, businesses seeking Series C funding had a nearly $118 million pre-money estimate. The median Series C band was $52.5 million. For these startups businesses, fundraising is nothing unknown. In particular, supporting credentials to venture capitalists have been ascertained to be one of their resilience.
If you are approaching a Series C startup funding, you’ve already done a ton of the hard work directing a flourishing, fast-growing business. In this next fundraising stage, evaluate the elements that will make the funding round a huge hit, enabling continued development. Such elements prove particularly necessary during challenging economic periods when investors like to learn how your startup survives a less than outstanding industry climate and discovers opportunities amidst the threats.
Here are the top five metrics that Series C startups would like to concentrate on as they seek more funding. Feel free to take a look.
Reliable customer retention
Venture capitalists have always shared that:
- To pass the Series A check; you need a product
- To get a Series B check, you need traction
- To get a Series C check, you need a business.
And successful businesses have lots of satisfied clients. At this phase in a startup’s lifecycle, the dual or triple-digit transition you’ve encountered may start to delay. That makes sense, specifically if you’ve garnered some fair market claim. For these grounds, showcasing robust customer retention. Contrarily, lower churn rates are essential. Both indicate that your current clients are not only happy with your by-product but that there are presumably more growth prospects via new by-products within your customer base.
New product expansion/introduction
You’ve created your initial product and presumably released numerous updates and the latest versions. As you close a Series C startup funding, capitalists will be curious about what’s next. They’ll like to comprehend the possibility of more remuneration from completely new by-products that your clients may enjoy or require. It could mean presenting your by-product to unexplored verticals. For instance, if you’ve introduced a precisely B2C by-product, capitalists may be eager to know if there’s a B2B application. Your startup may also start to discover completely new product lines to entice even more clients or extend the lifetime worth of your clients.
Your startup may look for multiple ways to drive continued growth at this phase. Acquisitions of competitions or businesses with product series complementary to your own deliver a positively feasible solution. Your Series C may offer capital for the fresh purchase of a company. You read that right – capital that may double your market stake or offers access to synergies and technologies that take your startup to the next level. If funding acquisition is the key objective, bringing in an M&A team earlier to tee up the approach. Such experts can deliver insights into conceivable targets, contract structures, and the full spectrum of capacities that the acquired startup might provide.
Review the IPO potential
The Series C raise is the conclusive stop for most startups on their fundraising journey. Different rounds usually become so enormous that they surpass the funding total of confidential capitalists. At the end of a Series C, capitalists will be interested in the prospect of an IPO. And they’ll like to understand how your startup plans on boosting its valuation before the public offering. It’s vital to cite that specifying valuation at this end is a more tangible drill than perhaps the creators encountered in the past. The pre-IPO valuation will represent customers’ numbers, current revenue, and one-time growth.
The other capitalists
At this time, investment—while even risky—is far smaller than in the premature stages of the startup. Then, when the vision needed to be demonstrated, there was no little revenue. Your startup now has a substantial customer base, a verified track record of wins, and the prospect of even more. Consequently, you’ll presumably draw more seasoned capitalists, including those who possibly haven’t existed in the mix earlier, such as investment banks, hedge funds, and private equity corporations. The capacity to convey a corresponding investor that then fetches in others. More high-profile parties can be game-changing as each investor’s sight gives the other faith.
Steady growth is no small feat. Apart from knowing a startup founder salary in India, if you’ve acquired the Series C stage, you’ve put in a ton of useful work. So keep these elements top of sense as you expand Series C funding, and you’ll discover even more success.