The Series A funding market shows signs of improvement heading into 2025, offering some fresh hope for early-stage startup founders. While I expect valuations to hold steady around current levels, I’m optimistic that the volume of deals will increase and more startups will get funded. Of course, securing a successful Series A round is never a small feat. Founders must overcome financial, operational, and strategic hurdles while sidestepping common mistakes that can derail their progress.
Series A Mistakes to Avoid
1. Not Thinking Through Long-Term Progression
Raising a Series A is a milestone achievement, but it’s only part of your startup’s financial journey. Before you close the round, you need a clear plan for what comes next:
- Will you aim to be cash-flow positive after the Series A?
- Are you expecting to raise subsequent rounds (Series B, C, etc.)?
Without a well-thought-out progression plan, you risk burning through capital without achieving key milestones needed for the next stage of growth.
2. Being Desperate for Cash and Taking Any Offer
It’s tempting to take the first term sheet you receive when cash is tight, but desperation can lead to poor long-term decisions. Accepting unfavorable terms or partnering with the wrong investors can create challenges during your Series B round. Evaluate offers carefully and prioritize investors who align with your growth vision.
3. Pitching to the Wrong Investors
Just as VCs perform due diligence on startups, founders need to evaluate potential investors. Before pitching, ask yourself:
- Will this VC provide support beyond just capital (e.g., mentorship, connections, expertise)?
- Are they a good cultural and strategic fit for my team and vision?
- Does the amount I’m raising align with the VC’s typical investment size? Due diligence is costly for investors, so many have minimum check sizes to justify the process. Approaching investors who aren’t a fit wastes time and resources.
4. Not Justifying Why You’re Raising a Specific Amount
Investors will want to know exactly why you’re raising the amount you’ve requested.
Be prepared to:
- Show detailed financial projections. For a Series A round, VCs typically expect financial projections that demonstrate a clear path to scalability, including revenue growth, gross margin improvements, and cost management over the next 3–5 years. Highlight key metrics such as customer acquisition costs (CAC), lifetime value (LTV), and break-even timelines, aligning them with realistic assumptions and market opportunities.
- Explain how the capital will fuel growth and achieve critical milestones.
- Prove that your fundraising target aligns with your business strategy.
Without a clear, data-driven rationale, investors may lose confidence in your ability to execute.
5. Underestimating Your Funding Needs
Raising just enough to get through the next 12 months is risky. Fundraising is time-consuming and can distract you from running the business. Ideally, aim to secure enough capital to sustain your growth for at least two years post-Series A.
This buffer gives you time to hit milestones, scale effectively, and approach Series B investors from a position of strength.
6. Lacking a Clear Go-to-Market Narrative
Your go-to-market strategy and long-term profitability narrative must be rock-solid.
Investors want to understand:
- How do you plan to acquire customers efficiently?
- What does your growth trajectory look like at scale?
- How and when do you expect to achieve profitability?
Vague or overly ambitious plans without a clear connection to revenue and profits can make investors hesitant to back your startup.
7. Ignoring the Macroeconomic Environment
Remember, market conditions matter! A valuation a competitor secured two or three years ago may not reflect today’s funding dynamics. Founders who ignore macroeconomic realities risk setting unrealistic expectations and alienating investors.
Be aware of:
- Current trends in valuations for startups at your stage.
- The overall funding climate and investor appetite in your sector.
8. Overcomplicating Your Pitch Deck
Your pitch deck is not a deep technical dive—it’s a story about your business and its future. While technical details matter, most Series A investors won’t have the same expertise as you or your team.
Focus on:
- Clear, concise messaging.
- Highlighting the business opportunity, growth potential, and financial projections.
- Making it easy for investors to understand the value you bring.
Avoid getting lost in technical jargon or overwhelming your deck with excessive detail.
Final Thoughts: Prepare, Plan, and Align
Raising a successful funding round requires careful preparation, a clear narrative, and alignment with the right investors. By avoiding these common Series A fundraising mistakes, you’ll improve your odds of securing funding and set your startup up for long-term success.
If you’re preparing for a Series A raise, Burkland’s fractional CFOs, FP&A experts, accountants, and tax professionals can help you build financial clarity, develop compelling investor materials, and navigate the process with confidence.
Contact us today to start your Series A journey with a strong financial foundation.