How To Secure Series A Investment In The UK: A Guide For Startups

Securing Series A investment is a big moment for startups. This funding round is typically the start of huge expansion and growth, and can sometimes help inject millions of dollars into the company.

But how do you go about raising Series A investment? And what does it mean?

Here, we break it down for you.

Understanding Series A Funding

Series A funding is typically launched by startups that have developed their product and user base, but need an injection of capital to expand. Unlike seed funding, which usually comes from the founders, people they know or angel investors, Series A rounds usually involve Venture Capital firms.

In general, Series A investments look to generate around £10-15 million of capital, though this can vary slightly by industry.

However, despite some fluctuation in the amount of capital needed, it’s widely known that a successful Series A investment could be the start of huge growth for a business.

Successful Series A Investments

The UK’s tech sector attracted £12 billion in venture capital in 2023 alone, showing how interested investors are in innovative startups.

Despite a recession, sectors such as fintech, AI and biotech continued to draw in a lot of interest from both local and international investors. This interest led to some incredible funding rounds, reaching amazing heights.

In fact, one of the biggest in the UK was from FinTech Revolut, which raised $66 million in its Series A round in 2017, a move that propelled it into a massive FinTech powerhouse.

Even bigger was autonomous vehicle unicorn Conigital, which raised a £500 million Series A+ funding round in September.

With Series A rounds reaching in the hundreds of millions, it’s clear that investors are keen back companies that they think are revolutionising their sectors, and definitely have the capital to do so.

How To Prepare For Series A Investment

If you are a business that is thinking about a Series A investment round, here are a few key things you need to do before starting:

Refine Your Business Model

Investors at Series A stage are looking for startups with a clear business model.

To prepare for this, ensure your product or service not only address a market need but also shows potential for growth and profitability.

It’s important to have a plan that shows exactly how the investment will help the business grow financially.

Evaluate Your Team

A lot of investors look just as closely at the team as they do the numbers. An experienced and dynamic team managing the company is important to help entice investors.

Get Your Metrics Right

Investors need to see hard evidence that your startup has demand and potential. This means showing how many customers you’ve engaged, what assets you’ve developed and how quickly the business has become noticed.

Research Investors

Not all venture capital firms invest in a variety of business. In fact, many do not lead Series A rounds and others only look to back specific sectors.

Research firms that have a history of investing in your sector and size to make sure you aren’t pitching to the wrong people.

Perfect Your Pitch

Your pitch is your chance to grab their attention, and should explain what your company does and why it’s valuable.

In your research stage, figure out what would entice the investors. You want them to see you as strategic, and having your facts ready is the best way to show this.

Do Your Due Diligence

Venture capital firms will always dive into your numbers before investing in you. This includes critically looking at your finances, business, the market you are trying to disrupt and any potential legal issues.

Make sure you’re one step ahead of them and give them everything they need quickly to ensure the process is as quick and easy as possible.

UK Series A VCs To Consider

Need help finding the right partner? Check out these 4 businesses that could help you take your business from Seed to Series A.

Octopus Ventures

Based in London, Octopus Ventures is one of the biggest and most active early-stage investors in Europe. They focus on technology and healthcare, investing in a number of companies at the Series A stage and beyond.

LocalGlobe

LocalGlobe, based in London, is known for its Seed and Series A investments in UK startups. They invest in many sectors including technology, health, and consumer services.

Dawn Capital

Dawn Capital is a London-based VC firm that invests mainly in software and fintech startups. They lead companies through Series A funding, helping them grow with a big injection of capital and strategy support.

Notion Capital

Specialising in SaaS and cloud companies, Notion Capital is a London-based VC firm that supports businesses from Series A upwards. They focus on helping European tech companies grow and eventually dominate their sectors.

In conclusion, while securing Series A investment in the UK is tough, through preparation and a strategy, companies can give themselves the best chance of success.

Once you can understand what investors are looking for and communicate how your startup meets these criteria, you’ll be well on your way to launching a successful Series A funding round.