You’ve reached an important milestone in your business by getting approved for Series A funding. After you receive your funds, you may wonder what to invest your money in to ensure consistent growth in your business.
As you build out your strategies, you may want to consider how to allocate your funds to drive marketing.
What Is Series A Funding?
Series A funding, also referred to as Series A investment or Series A financing is a term used to describe the venture capital given to startups during their capital-raising process.
It is equity-based financing that takes place after a startup company’s seed funding stage and before the company’s Series B rounds.
How Does Funding Work?
There are several stages or rounds involved in the process of growing a company through the use of outside investors.
Many startups kick off their businesses using seed funding, also known as angel investor funding, that provides them with financial backing in exchange for a certain amount of equity ownership in the company. Following this round of funding is Series, A, B, and C.
Source: University Lab Partners
When a startup develops an established track record with consistent revenue and a solid user base, they may elect to graduate to Series A funding. As a business matures, it is common for them to progress through all the funding rounds as long as they are providing value and satisfactory returns for their investor(s).
Since investors hope to regain a return on their investment, they retain partial ownership of the company. This way, when the company grows and becomes profitable, the investor shares in the success by receiving a portion of the profits.
Investors are interested in business leaders who have more than great ideas for Series A funding. They are looking for businesses that have solid strategies for developing ideas into profits to make a successful company.
The average funding amount raised during Series A rounds is about $12.5 million, and the largest investors during this stage are venture capital firms.
Before Series A funding is granted to startups, they must undergo a valuation. Analysts who perform valuations look at various factors such as market size, management, and risk factors. The data collected in the valuation determines what investors are likely to contribute to the business.
Common Goals of Series A Funding
The core objective of series A funding is to ensure a company experiences continued growth. In this stage, a company aims to do the following:
Optimize Your User Base.
Series A funding can provide new businesses with financial resources they can use to allocate to efforts that help them increase their customer base. Some things a startup may do to optimize their user base include maintaining excellent customer service, keeping their content fresh, or asking their customers for feedback.
Reach Product Development Milestones.
Startups usually have a set of milestones they hope to reach by certain dates. But a lack of proper funding can stall their progress.
For example, a product feature or functionality is due to go live in a few months, but there are no resources left to develop that particular feature. Series A funding helps startups reach these product milestones.
Attract New Talent.
When businesses grow, they need more talent to help them reach their goals. Prospective employees may be hesitant to work for startups because they are not as stable as working for an established company, and they often don’t pay as much.
Companies that receive Series A funding can afford to attract and pay top talent while providing good employee benefits that make their staff feel valued.
Attract More Investors.
Once a business has secured one or two investors, it is common to attract additional investors. Startups that use their funding appropriately can position themselves well in the market, and investors may start seeking them out to invest money in their business.
Many of the common goals associated with Series A funding can be achieved if you invest in key marketing efforts.
6 Marketing Investments to Consider With Series A Funding
Investing your money into your marketing strategy at an early funding stage can help you to achieve your desired results to get you to the next stage of funding. Here are six marketing investments to allocate your Series A funding to:
In your seed stage, you should’ve focused some of your attention on brand positioning and brand messaging to set yourself apart from your competitors. During the Series A funding stage, you should focus on brand awareness to build trust with your customers and prospects.
To establish brand awareness, you can find ways to identify with your audience in a way that comes off as more human. You can also begin engaging with your customers through social networking platforms and optimizing your content to make sharing easy.
Brand awareness helps you to build your customer base by making your brand recognizable through sharing your story.
Content Marketing Strategies
Investing in a content marketing strategy can help you build brand awareness and develop organic leads. Content marketing in a startup begins with understanding who your audience is and what they like.
Before you begin crafting more strategic content, you must consider who your target audience is and why you are crafting the content. You may produce content such as long-form blog articles, social media posts, videos, case studies, or other forms of content.
When you begin to understand your audience and their pain points better, you can decide what type of content to publish with topics that are relevant to them.
Series A funding can help you take your content marketing strategy to the next level. Use your extra funding for a variety of content marketing assets, including:
Content management software
You may not have invested in a full website during your seed stage since it’s possible to get by using a simple splash page. You should have formed a decent customer base by the time you reach the Series A milestone, which gives you the opportunity to display customer testimonials and product or service benefits on your website.
Some other features you may consider adding to optimize your website for conversions are:
Customer service chatbots
Product or service explainer videos
You may also consider adding proper tracking tools to your website to keep up with conversions and bounce rates.
Pay per click (PPC) ads are popular for startups because they can help you purchase extremely targeted traffic from search engines or social media sites like Facebook and Instagram.
You can design custom ads for your company that appear on the search engine results page any time someone searches for keywords related to your business. If you purchase social media ads, your target audience will see them in their newsfeed or in their stories.
PPC ads are a great investment for startups in the Series A stage because they help drive a lot of traffic to your site as long as your ads are specific and engaging to your target audience.
Outsourced Marketing Services
Although Series A funding provides you with a good sum of money to invest into your business, it may be difficult to hire, train, and pay salaries for an entire marketing team including content creators.
If your business isn’t ready to hire an in-house marketing team, you may consider investing in outsourced marketing. Marketing firms often charge a flat monthly fee for a variety of marketing services. Most marketing firms charge less than what it costs to pay one full-time employee.
Here are a few benefits of outsourcing your marketing:
It gives you access to marketing experts.
It can save you time and money.
Your marketing ROI is likely to increase.
You get a head start on hitting your goals.
You don’t have to worry about marketing team members leaving or being absent.
Search Engine Optimization
Search engine optimization, commonly referred to as SEO, helps to boost your content marketing strategy by driving traffic to your website and attracting new leads.
SEO may seem technical and difficult at first, but as long as you read up on it and use the right tools, you should be able to accomplish basic SEO objectives.
If you choose to do SEO yourself, you may use SEO tools like Moz to help you identify relevant keywords to include on your site and throughout your content. You may also need to make structural changes to your website to include backlinks to your main domain.
Search engine optimization mostly costs you time unless you hire an SEO strategist or outsource your SEO as a part of your marketing package.
Establishing yourself as a trustworthy business that is managed well, has a stable customer base, drives a consistent flow of traffic, and continually fuels revenue involves investing most of your time and money into marketing efforts.
When you start your business off by investing in great marketing practices, you are sure to accomplish your goals and receive more funding from quality investors as you grow.
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