Series A Funding (Growth & Scaling) | Startup Basics

Series A Funding is meant for those who aim to accelerate their growth.

At this stage, startups should apply only with a proven product-market fit and some revenue history. Unlike the earlier funding stages, which focus on testing the business model in practice, Series A is all about scaling it.

Reaching series A funding is a tremendous milestone for any startup.

What is the Purpose of Series A Funding?

• Scaling the product & market reach – Expand user base & enter new markets,
• Monetization & business model optimization – Strengthen revenue streams,
• Team Expansion – Hire more developers, marketers, and sales teams,
• Customer acquisition & marketing – Invest in branding, paid ads, and partnerships,
• Technology & infrastructure upgrades – Improve platform performance and security.

Which Is Better: Series A or B?

Series B isn't necessarily "better" than Series A – it just serves a different purpose.

Series A focuses on product-market fit and early growth acceleration. Series B is more about scaling an already proven and entrusted business model.

The right round for your startup depends on its current stage and funding needs.

Interested in a bird's-eye perspective?

Click here to read our main article on Startup Funding Rounds >

Raising Series A funding comes with several challenges that startups must overcome.

Most VC investors require strong growth metrics and a clear path to expansion before committing funds.

Additionally, during the Series A funding, you are always faced with a highly competitive market. Many startups struggle here to differentiate themselves and prove their unique value proposition.

Another vital challenge during this phase is high valuation expectations.

Series A investors typically look for startups valued between $20 million and $100 million or more.

In short, the main pillars of Series A success are:

• Proven traction,
• Strong revenue potential,
• Market expansion capabilities.

This is what separates high-growth companies from those that struggle to scale.

Once funding is secured, there is immense pressure to deliver fast growth, with investors expecting rapid scaling and significant traction to justify their investment.

📌 Tip: Many startups fail at Series A because they lack clear revenue models or scalable customer acquisition strategies.

Series A funding round mainly attracts venture capital (VC) firms. They are institutional investors providing large funding rounds to help startups scale.

Corporate investors also participate in this stage, focusing on startups that align with their strategic interests and industry focus.

While angel investors typically invest in earlier stages, some late-stage angel investors do join Series A rounds if they see strong potential. It is worth noting that Private equity (PE) firms may also occur in Series A.

Some of the top VC firms known for Series A funding include Sequoia Capital, Andreessen Horowitz (a16z), Accel, Benchmark Capital, and Index Ventures, all of which have backed numerous successful startups.

📌 Example: Instagram raised a $7M Series A from Benchmark Capital to scale before being acquired by Facebook. Airbnb raised a $7.2M Series A from Sequoia Capital after proving demand in the short-term rental market.

• Show strong revenue & traction – Show increasing revenue, user engagement, and retention
• Present clear business model & monetization – Investors want startups with proven revenue streams
• Show scalability potential – Demonstrate how the startup can grow 10x+
• Expose experienced team – Investors look for a strong leadership team that can execute growth
• Network with top VC firms – Use warm introductions, pitch competitions, and LinkedIn outreach

Click here to move on to Series B Funding Round >