Series A: What is a Series A Funding Round?

What is a Series A Funding Round?

Series A represents the first major institutional funding round in a startup's journey. It comes after the seed round and constitutes a pivotal stage: the startup has demonstrated product-market fit and revenue generation capability, and it raises substantial funds to scale. Series A amounts typically range from 2 to 10 million euros in Belgium and Europe, although some rounds may exceed these ranges depending on sector and company traction.

At this stage, investors are primarily venture capital funds specialising in early-stage and growth rounds. In Belgium, funds such as Fortino Capital, Smartfin Capital or Sofina invest in Series A, often alongside European funds like Balderton Capital, Index Ventures or Point Nine. Seed round investors (business angels, early-stage funds) frequently participate in the Series A round by exercising their pro-rata rights.

Series A marks a fundamental shift in company dynamics. The focus moves from product development and market validation to commercial growth and process optimisation. The team expands significantly, processes become formalised and performance expectations intensify.

Why Series A Matters

Series A is often described as the transition from adolescence to adulthood for a startup. It is at this stage that the company's ability to become a significant market player is determined. The stakes are multiple:

• Product scaling: financing advanced feature development, technical scalability improvements and product adaptation for new market segments or geographies.
• Sales team building: recruiting a structured sales force, implementing repeatable sales processes and investing in marketing to accelerate customer acquisition.
• Geographic expansion: for Belgian startups, Series A often funds expansion to neighbouring markets (Netherlands, France, Germany) or more broadly across Europe.
• Management professionalisation: establishing support functions (finance, HR, legal) and structured governance with an active board including investors.
• Series B preparation: reaching the metrics and maturity necessary to raise an even larger round 18 to 24 months later.

How It Works

The Series A fundraising process is considerably more structured and demanding than the seed round. Venture capital funds at this stage have analyst teams performing thorough due diligence covering all company aspects: technology, market, finance, team, legal and intellectual property.

Series A investors evaluate startups against precise criteria. They typically expect ARR (Annual Recurring Revenue) between 500,000 and 1.5 million euros, monthly growth above 10%, net revenue retention above 100% and a founding team capable of managing a 20 to 50-person organisation.

Term sheet negotiation in Series A involves more sophisticated elements than seed: liquidation preferences (1x non-participating or participating), anti-dilution clauses (broad-based weighted average), governance rights (board seat, veto rights on certain decisions) and pro-rata rights for subsequent rounds.

Technical due diligence takes on particular importance in Series A. Investors often commission external experts to audit software architecture, code quality, technical debt, security and platform scalability. A solid, well-documented and maintainable technical foundation is a major confidence factor for investors.

Concrete Example

Let us revisit the Brussels-based e-commerce logistics startup that raised its seed round. Two years after seed, the company reached 1 million euros in ARR with 200 customers in Belgium and the Netherlands. The team grew from 5 to 18 people. The technical platform, built from the start by Kern-IT with a modular Django architecture and well-structured APIs, handles the scaling without issues.

The founding team decides to raise 5 million euros in Series A to fund expansion into France and Germany, recruit 20 additional people and invest in predictive AI features. After a three-month process involving discussions with eight European funds, Fortino Capital leads the round with 3.5 million euros, alongside Volta Ventures (seed investor exercising pro-rata) and a public co-investment fund.

The pre-money valuation stands at 18 million euros, representing an 18x multiple on ARR. Technical due diligence played in the startup's favour: auditors highlighted architecture quality, test coverage and technical documentation as strengths that reduce technological execution risk.

Implementation

1. Reach target metrics: aim for ARR of 500,000 to 1.5 million euros, monthly growth above 10% and net retention rate above 100% before launching the fundraising process.
2. Optimise technical scalability: ensure the software architecture supports a 10x increase in user volume without major overhaul. Technical debt must be under control.
3. Structure the sales team: demonstrate a repeatable sales process with clear metrics: customer acquisition cost (CAC), customer lifetime value (LTV), LTV/CAC ratio above 3.
4. Prepare for due diligence: anticipate investor questions by preparing a comprehensive data room including audited financials, customer contracts, technical documentation and competitive analysis.
5. Choose the right lead investor: prioritise a fund that brings value beyond capital — sector expertise, network in target markets, experience scaling similar startups.
6. Negotiate wisely: balance valuation (avoid over-raising) with governance and protection terms, thinking long-term about subsequent rounds.

Associated Technologies and Tools

• Scalable architectures: Django, microservices, Docker containerisation and Kubernetes orchestration to build platforms that support post-Series A growth.
• Monitoring tools: Datadog, New Relic or Grafana to demonstrate platform reliability and performance to investors.
• Product analytics: Mixpanel, Amplitude or Segment to provide detailed, convincing traction metrics during due diligence.
• Governance tools: Carta for cap table and ESOP management, Notion or Confluence for corporate documentation.
• CRM and sales ops: Salesforce or HubSpot to demonstrate a structured sales pipeline and repeatable sales processes.

Conclusion

Series A is the moment a Belgian startup proves it can become a scale-up. This demanding funding round requires meticulous preparation on all fronts: product, technology, team, finance and commercial. Technical foundation strength is a major differentiator during due diligence. At Kern-IT, we build technical platforms designed for growth from day one — modular architectures, quality code, comprehensive technical documentation — enabling our startup clients to successfully pass the critical examination of Series A investors.