## Series A Round

A **series A** is the name typically given to a company's first significant [round](https://en.wikipedia.org/wiki/Venture_round "Venture round") of [venture capital financing](https://en.wikipedia.org/wiki/Venture_capital_financing "Venture capital financing"). It can be followed by the word round, investment or financing. The name refers to the class of [preferred stock](https://en.wikipedia.org/wiki/Preferred_stock "Preferred stock") sold to investors in exchange for their investment. It is usually the first series of stock after the [common stock](https://en.wikipedia.org/wiki/Common_stock "Common stock") and common [stock options](https://en.wikipedia.org/wiki/Stock_options "Stock options") issued to company founders, employees, [friends and family](https://en.wikipedia.org/wiki/Seed_round "Seed round") and [angel investors](https://en.wikipedia.org/wiki/Angel_investor "Angel investor").

Series A rounds are traditionally a critical stage in the funding of new companies. Series A investors typically purchase 10% to 30% of the company.[1] The capital raised during a series A is usually intended to [capitalize](https://en.wiktionary.org/wiki/capitalize "wikt:capitalize") the company for 6 months to 2 years as it develops its products, performs initial marketing and branding, hires its initial employees, and otherwise undertakes early stage business operations.[2]  
It may be followed by more rounds ( [Series B, Series C, etc](https://en.wikipedia.org/wiki/Venture_round#Round_names "Venture round")).

## Sources of capital

Because there are no public exchanges listing their securities, private companies meet [venture capital](https://en.wikipedia.org/wiki/Venture_capital "Venture capital") firms and other [private equity](https://en.wikipedia.org/wiki/Private_equity "Private equity") investors in several ways, including warm referrals from the investors' trusted sources and other business contacts; investor conferences and demo days where companies pitch directly to investor groups. As [equity crowdfunding](https://en.wikipedia.org/wiki/Equity_crowdfunding "Equity crowdfunding") becomes more established, startups are increasingly raising their Series A round online using platforms like [SeedInvest](https://en.wikipedia.org/wiki/SeedInvest "SeedInvest") in the US.[3] These blended rounds include a mix of [angel investors](https://en.wikipedia.org/wiki/Angel_investors "Angel investors"), strategic investors and customers alongside the offline venture capital investors.[4]

## Structure

Smaller investment amounts are usually not worth the legal and financial expense, the burden on a company of adjusting its [capital structure](https://en.wikipedia.org/wiki/Capital_structure "Capital structure") to serve new investors, and the analysis and [due diligence](https://en.wikipedia.org/wiki/Due_diligence "Due diligence") on the part of institutional investors. A company that needs money for operations but is not yet ready for venture capital will typically seek [angel capital](https://en.wikipedia.org/wiki/Angel_capital "Angel capital"). Larger amounts are usually unwarranted given the cost of business in fields such as software, data services, telecommunications, and so on. However, there are routinely series A rounds in excess of $10 million in fields such as [pharmaceuticals](https://en.wikipedia.org/wiki/Pharmaceuticals "Pharmaceuticals"), [semiconductors](https://en.wikipedia.org/wiki/Semiconductors "Semiconductors"), and [real estate development](https://en.wikipedia.org/wiki/Real_estate_development "Real estate development"). They all share a similar legal and financial framework, but specific terminology, deal terms, and investment practices vary according to business customs within different countries, business sectors, investor communities, and geographical regions.

In the United States, [Series A preferred stock](https://en.wikipedia.org/wiki/Class_A_share "Class A share") is the first round of stock offered during the seed or early stage round by a [portfolio company](https://en.wikipedia.org/wiki/Portfolio_company "Portfolio company") to the venture capital investor. Series A preferred stock is often convertible into common stock in certain cases such as an [initial public offering](https://en.wikipedia.org/wiki/Initial_public_offering "Initial public offering") (IPO) or the sale of the company.

Series A rounds in the United States venture capital community, particularly in Silicon Valley, are widely reported in business press, [blogs](https://en.wikipedia.org/wiki/Blog "Blog"), industry reports, and other media that cover the technology industry. Series A rounds also occur in non-technology industries and receive investment from [investment banks](https://en.wikipedia.org/wiki/Investment_bank "Investment bank"), corporate investors, angel investors, public agencies, and others, that receive less press coverage than technology startup funding rounds.[ _[citation needed](https://en.wikipedia.org/wiki/Wikipedia:Citation_needed "Wikipedia:Citation needed")_]

In Britain, Series A equity funding is typically structured by the issuance of [preference shares](https://en.wikipedia.org/wiki/Preferred_stock "Preferred stock"), redeemable shares, redeemable preference shares, ordinary shares (possibly split into different classes, for instance A ordinary shares and B ordinary shares), or some combination thereof.