Journey To Series A e Book
Journey To Series A e Book
Journey To Series A e Book
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About the Author
Dr. Ola Brown is a seasoned
venture capitalist, second-time
fund manager, and an investor
in nearly 30 companies within
the healthtech and fintech
sector. Dr. Ola’s first fund
returned 25% internal rate of
return (IRR) to investors.
Dr. Ola founded Healthcap
Africa in 2020 to focus on venture capital investing
and infrastructure. To date, HealthCap has invested
in almost 20 startups in the fintech and healthtech
sectors with a total valuation of about $700m.
The companies in HealthCap’s portfolio have created
over a 1,000 jobs, operate in 10 countries across the
globe and have nearly a million users/customers.
Dr. Ola holds a Master’s degree in Finance
and Economic Policy from the University of
London, where she studied Microeconomics,
Macroeconomics, Financial Markets, Capital Markets,
Banking, Banking regulation, and IMF/Economic
policy and is currently pursuing a doctorate in
finance.
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Introduction
HealthCap Africa is a
venture capital firm
that invests in pre-
Series A companies
across Africa in
the fintech and
healthtech spaces.
We are continually
involved in advising
our portfolio
companies leading
up to their Series A funding rounds. In this ebook, we
focus specifically on Series A funding rounds because
they represent a significant step up from the seed
round in the following ways:
resource policies.
f. Strict reporting standards.
g. More complex contracting terms.
h. Valuation usually considers business fundamentals
such as margins, profitability, growth rate, and
churn rate.
i. Scrutiny of the quality of software, including
possible audits of code/UX and bug identification.
j. Greater emphasis on the financial model and
growth predictions/milestones that the company
intends to achieve.
SAFE/ Convertible
Investment Vehicle Priced Round Priced Round
Note
A. Customer funding:
Professor John Mullins from the London Business School
argues that if you can find enough customers who will
pay you good money (ideally in advance) for the solution
to their problems, you’re in the process of creating and
you won’t need to raise capital anywhere else.
B. Venture debt:
According to the
Corporate Finance
Institute, venture debt is
a type of debt financing
obtained by early-
stage companies and
startups. This type of
debt financing is typically
used as a complementary method to equity financing.
Venture debt can be provided by both banks specialising
in venture lending and non-bank lenders. Venture debt
is non-dilutive and can be used to provide financing for
cash-flowing businesses.
D. Crowdfunding:
If your product has a large community of fans, then
running a crowdfunding campaign may be a great
alternative to raising a Series A.
In February 2022, Substack, a newsletter platform,
successfully raised over $65 million through
crowdfunding from its community, within a short span
of time. The crowdfunding campaign was open to all
Substack users, with a minimum investment of $100.
Substack also offered a discount on the company’s
Customer Funding
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Customer funding means obtaining funding
for a business from customers. For example,
technology companies that have raised little
or no funding, such as Zoho Books and
Mailchimp.
Venture Debt
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This type of debt financing is typically used
as a complementary method to equity
financing. Venture debt can be provided by
both banks specialising in venture lending
and non-bank lenders.
Alternat i v es t o
R aising a Ser i es A
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A seed extension round occurs after a startup's
initial seed round of financing, while a bridge
round occurs when a startup needs additional
funding to bridge the gap between its current
financing and its next funding round.
Crowdfunding
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Crowdfunding may be a great
alternative to series A if your product
has a large community of fans.
Ecosystem
• Investors wishlist
• Speak to team
• Start working on 18 Months
compliance
A. Fundraising Process
Software to use?
Microsoft Excel and Google Sheets
work fine. But you may also want to
try CRM software.
Showcase significant
4 background, qualifications,
and achievements.
C. Compliance
Tax, staff HMO/
insurance, staff
pensions, employment
contracts, minutes of
board meetings, and
other statutory legal
policies should all be
reviewed and regularised,
if necessary, before going into a Series A funding
Due
Capitalisation Product Permits and
diligence
table roadmap licenses
materials
Any
Employee Customer potential
Patents
information feedback legal risks or
liabilities
you knew.
It looks EXTREMELY bad if a junior analyst at a VC firm is
asking you questions about your own company that you
can’t answer.
During the fundraising process, investors will want to
ascertain the level of key man risk in your company,
so they will almost definitely want to have one on
one meetings with key leaders like your Head of
Human Resources, your Head of Operations and most
importantly, your Head of Finance.
Ensure that investors are familiar with the fundraising
process, as well as the documents in the data room that
are relevant to their departments.
Be transparent
Create wishlist
of investors
Inform team Avoid pitfalls
Collate compliance
document
End of series A
Collate documents in data room round