Series B Round
What is it?
- Series B is a priced round, meaning the existing shareholders and new investors must agree on a pre-money valuation of the company.
- The round usually has a lead investor such as a VC fund who sets the terms of the round and is joined by other investors.
- It is common for Series A or convertible note investors to participate using pro-rata rights.
What to expect?
- Series B fundraise is typically USD 10 million and above and requires the company to issue preferred shares representing 20-30% dilution.
- The company is also required to create an ESOP pool of 15-20% first prior to the issuance of shares. It is common for lead investors to take up board seats in proportion to the investment.
- There is less investor tolerance for expensive experimentation and more scrutiny on business and financial performance.
- Transactions documents are similar to a Series A round.
Who should consider
- Series B is a growth turbocharge for fast growing companies who have started demonstrating first sign of path to profitability such as positive contribution margin (gross profit) or customer lifetime value greater than customer acquisition cost.
- A company at series B is also expected to be a lot more established and professionally operated, such as high governance standards, audit by top accounting firms, strong internal processes and be able to meet the legal, compliance and regulatory standards of established large companies.
How Can Bayfront Help
Strategy Review
Detailed analysis of the Client and advise on value-adding corporate strategies.
Competitive Benchmarking
Detailed analysis of the Client and benchmark them against Industry standards.
Structuring
Detailed analysis of the Client’s capital structure and advise on the optimal proportion of equity and debt.
Deal Execution Management
Assisting in execution of deal processes, most commonly in the form of capital raising.
Valuation
Helping to navigate through the complexities of transaction, improve transaction execution, and increase the chance of success.
Information Memorandum
For presenting to different target audience such as lenders, new sales relationships, new client relationships.
Governance Review
To determine the specific governance needs of a company and assist in areas which would minimize risks and help achieve business goals.