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Industry study 02 of 23 · Venture Capital Research Companion

Early-Stage Venture: Series A & B

~5,000 words · 2 technical exhibits

The Series A is where classic venture capital lives. A partner at an institutional firm leads a priced round, takes a board seat, buys ~15–25% of the company and commits to helping build it for the next 5–10 years. Seed money buys an option on a team. Series A money buys a business model in its earliest repeatable form, and the Series B buys proof that the model scales. Most of a venture fund's eventual returns come from decisions made at these two stages: which companies to lead, at what ownership, and where to concentrate follow-on capital.

What the study covers

  1. 1Overview: what each round is meant to prove
  2. 2Mechanics
  3. 3Key numbers
  4. 4Landmark Series A and B deals
  5. 5Pitfalls
  6. 6How an expert thinks about it
  7. 7Glossary
  8. 8Related sections

Technical exhibits

Worked examples, checklists and case studies included with this study.

Series a Round and Waterfall Worked Example

The Lumen Labs company from section 01 raising a $12m Series A: pool shuffle, pro rata, liquidation waterfall at six exit values, and the lead's path to fund-level returns (computed in Python)

Series a and B Readiness and Diligence Checklist

What leads check before an A or B: metrics, customer calls, cohorts, go-to-market and legal