What is Series B funding?

Definition: Series B is the third stage of raising capital for a business/startup.

It is equity-based financing preceded by seed funding and Series A meant to scale the business.

How does Series B funding work?

Series B funding starts can start when the company is established and needs more capital to grow.

In this stage, they evaluate their company and create a concrete growth plan to present to potential investors. Companies looking for Series B funding are valuated at around $30 million.

After building a list of potential investors the company will negotiate the amount of shares they are willing to give up and for how much capital. This process can take a year or more to finish.

When the investments are done, the company puts them to use and grows their business towards Series C.

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Article FAQs

What is the difference between Series A and Series B?

Series A is the second stage of investing after the seed round and the company is still considered in the development stage, hence the capital investments being lower. Series A is meant to establish a company, while Series B is meant to scale it.

Is Series B still early stage?

It is still considered early stage, but not like series A. By this point, the company has found its place in the market and is well-established, but they still have a lot of room to grow.

How hard is it to raise Series B?

It is very challenging as investors are looking for a structured team with significant results. They are taking a more considerable risk as investments in this stage go for significant amounts of money. It is much harder than in the previous two stages.