The Series A Balancing Act

By Chris Marks

I recently spoke to a cohort of CEOs at GAN’s Scale School about the process of raising a Series A Financing. Everyone in the group had raised seed financing in the past and was focused on follow-on capital. My task was to shed some light on the mentality of a series A investor, and how it may differ from that of an angel or seed investor. An interesting topic. The truth is, while seed financing is all about vision, and series B rounds are all about performance metrics, the series A financing tends to be a much more nuanced conversation. More often than not, the success or failure of any series A process rests in an entrepreneur’s ability to strike the right balance on several different fronts. Here are a just a few elements of the series A balancing act that we discussed:

Be confident, but also be vulnerable. You have always been confident in your business, and now you have some early performance data that shows you might just be right. Make your case to potential investors. At the same time, know that they do not expect you to have all of the answers — yet. Therefore, the challenge is to express why you remain bullish, while at the same time acknowledging the challenges ahead. It is what First Round Capital has called “building credibility through vulnerability.”

Move fast, but take time to listen to the market. A long drawn out process can kill any financing. The goal is always to build momentum and keep investors moving through the funnel. The challenge is to make sure that you are still hearing and processing the market feedback along the way. As investors fall out of the process, work hard to understand why. Every pitch is an opportunity to assess what is resonating and what is not. Work to anticipate and address the biggest investor questions. Adjust your presentation accordingly. The ability to be patient, while also being nimble, will give you the best chance of success.

Create scarcity, but don’t bluff. This is one of the hardest balancing acts for most entrepreneurs. Scarcity is the single biggest point of leverage in any process. It builds momentum, drives better terms and gets investors off the fence. As a result, most entrepreneurs try to create scarcity by getting more VCs involved in the process, mentioning other meetings, and referencing where other investors are in their diligence — which is all very appropriate. If, however, investors determine that false deadlines are being created, other investors’ interest is being over-stated, or term sheets that have been referenced don’t really exist, the whole exercise can backfire. Do create momentum. Do not undermine your credibility in the process.

Show confidence in your team, but acknowledge the need to upgrade. Every seed round pitch deck ends with the team slide and the unequivocal statement that “this is the team to get it done!” This resonates with seed investors who invest heavily in people. Series A investors also value good people, but they expect some portion of their capital to be used to grow the team, and to bring in people with more experience building at scale. Acknowledging this fact, while continuing to support your existing team, gives comfort to prospective investors. Your team is great, and now it can be even better.

Sell hard, but always be honest. No one believes in your company as much as you, and you are certain that several of the leads in your pipeline will be paying customers in no time. You want to communicate your confidence to those who are considering an investment. It is fine to sell your vision, just don’t create unrealistic expectations in the process. Your series A investors will be your partners for a long time. They will be showing up at your board meeting next quarter. Therefore, it is very important to make sure you are fully transparent before they commit. The only thing worse than not getting your financing done, is getting it done with misaligned investors.

Focus on your top choices, but never assume the deal is done. There is one investor who is saying all the right things, and promising a term sheet in the near future. They are your first choice of a partner. That is all great, but in the world of venture, a deal is not done until it is done. For the good of your company, never stop creating alternatives. It will only increase the likelihood of getting your top choice over the finish line.

The bottom line is that raising series A financing can be a challenge, and every process will have different twists and turns. A successful outcome may well hinge on your ability to strike the right balance when you talk about your business. And as you navigate the various conversations, never lose sight of the biggest balancing act of all: raising money may be important, but finding the right partners is essential.

Read More & Share

This is What Disruption Looks Like

By Chris Marks Over the last 25 years, technology has up-ended numerous industries that were long thought to be untouchable. From publishing to retail, from taxis to hospitality, things are starkly different than they were just a few years ago. During this time, technology has proven to be the great equalizer, wringing out inefficiencies, creating transparency, and leveling the competitive playing field by tapping into the new participation economy. If you look back at how this innovation...

Read More

10 Years of Techstars

By Chris Marks I still remember the first time I talked to David Cohen about getting involved in the Techstars program. It was back in 2007. I made the 4 block trek to see him in his small basement office, sat down across from him, and gallantly offered my services. He looked back, and said something along the lines of, “Cool.” This was followed by a relatively long silence (many would consider this awkward, but...

Read More

The Evolution of a Leader

By Chris Marks Founding a start-up and running a large high growth company are two roles that come with completely different job descriptions. They require different skill sets, different temperaments, and tend to attract different types of people. As a result, it is no surprise that so few early stage entrepreneurs transition to successful large company CEOs. But there are founders who have made the transition. And what they will tell you is that it...

Read More

This Stuff is Hard (w/ Joshua Hunt)

by Chris Marks When I partner with entrepreneurs who are raising venture capital for the first time, I know that I am going to have to help them adjust to a new, and often difficult, environment. Every entrepreneur is optimistic — it comes with the territory — but the fundraising process can be long and disheartening for even the most confident CEOs. I have found that there are two keys for any entrepreneur raising capital: balance and...

Read More

Fighting for Leadership

Over the course of the past winter, I found myself dealing with an issue in my prior fund’s portfolio that tested me as an investor, and as a person. As with most things in the start up world, once the problem arose, there was no easy fix. The one thing that was apparent, was that it was going to get worse before it got better. I buckled in, knowing full well what was ahead. Turmoil within a...

Read More


By Chris Marks If the Colorado start-up world can occasionally feel a bit small, the Boulder world can feel downright tiny. Having worked with Colorado start-ups and officed on Pearl Street for over 15 years, I am intimately familiar with the phenomenon of the “Boulder Bubble.” Which is one of the reasons that Turnpikers is such a welcome addition to the local tech scene. Hosted by two Colorado entrepreneurs, Luke Beatty and Danny Newman, Turnpikers features a weekly...

Read More

The Power of a Reboot

By Chris Marks Everyone struggles with being authentic. It comes with the territory — not only when you are part of a start-up, but when you are part of the human race. The world of venture capital is no exception. Recently, I had the honor of discussing this topic with my good friend Jerry Colonna of and Bryce Roberts of OATV and It was a fun and engaging conversation. If you are an entrepreneur...

Read More

Defining Authenticity

By Chris Marks Since launching Blue Note  Ventures, the most common question has been, “how will you know an authentic leader when you see one?” While I’m happy to provide some thoughts on the topic, a couple of clarifications are in order: First, I am not in the business of identifying who is an authentic leader and who is not. Far from it. My goal, and the purpose behind Blue Note Ventures, is to work...

Read More

Our Investment in Trelora

We recently made an investment in Trelora, a Denver-based company attempting to change the way that residential real estate is bought and sold in the United States. So how is Trelora going to change an industry that has been more resistant to change than the Catholic Church? Through a business model combining fixed transaction fees, non-commissioned agents, and a proprietary software platform that allows sellers, buyers and agents to connect directly and maintain complete end-to-end control over...

Read More