New fundraising rounds aren't just exciting for startups. They also make a statement to competitors, current investors, customers and the general public about a startup's value and its prospects for the future.

This is especially true during the Series A round. For most startups, the Series A round is their first significant round of outside funding. Whereas earlier stages of the startup might rely on smaller sums of seed funding from friends, family, crowdfunding and angel investors, the Series A round is the first time that most startups raise substantial amounts of money to fuel meaningful growth.

During the Series A round, companies typically trade a 10–30% stake in the company in exchange for preferred stock, so the risk is higher for this particular round of funding. Which investors join, which investors notably don't join and the amount raised all speak as to where the company stands and, more importantly, where investors see it going.

If you're a founder of a startup that's in its early stages, you're probably wondering when to raise Series A funding. Choosing the most advantageous moment to present your pitch deck can be as important as having impressive performance metrics and projections.

There are a few signs that the timing is right for your startup to raise Series A funding.

You have strong traction

The most important factor in when to raise Series A funding is traction. Strong month-on-month (MoM) growth is 12–20% or higher – the sought-after hockey-stick growth projection that gets investors excited.

Start connecting with investors when your MoM growth trend is thriving and you can offer solid reasons why this is likely to continue or even increase. If your growth is steadily climbing at 5–10% MoM and you anticipate it taking an upwards turn soon, you might want to wait until then to raise your Series A funding.

You have an active investor network

In anticipation of your Series A investment, it's a good idea to build and maintain relationships with investors as far in advance as possible before you plan to pitch to them. It's significantly harder to successfully commit an investor with a cold pitch. Talk to a large number of venture capitalists (VCs), in the knowledge that you won't pitch to all of them.

You have significant growth

VCs looking for Series A investment opportunities want to support high-growth companies, so make sure that your growth metrics are in the right range to appeal to them. Perhaps you're tracking 50% MoM growth, but your revenue is lower than what investors are looking for.

If you're not sure what level of growth will make investors take notice, ask other founders in your industry or investors in your network who might know. This is another reason to build active relationships with investors before you even pitch to them. They're usually happy to give insights on what they do and the reasoning behind how they do it – this will help you to secure your Series A investment.

You have demonstrated product-market fit

There's no set formula for measuring product-market fit, let alone for proving it. It's loosely defined as proof that what your company is doing – what goods or services you provide – is successfully filling an existing gap in the market. Earlier in your startup journey (such as when you're raising seed money), you have to prove that the market opportunity exists and that you and your team have the right ideas and skillset to fill it. But when you're raising Series A funding, you need to demonstrate more than potential – you need to show that you're actually hitting the mark. Make sure that you're highly confident in the story that you're telling to prove product-market fit before pitching for your Series A investment.

Your revenue is growing

Customer metrics such as traffic, retention and engagement are essential measures of company health and a key factor in when to raise Series A funding, but you need revenue growth for VCs to invest. When revenue growth is there, customer metrics will further validate what's working and why. Investors looking for Series A investment opportunities want to feel confident that you're going to make their money grow.

You understand your growth strategy

When you pitched to investors for your seed round of funding, you might have communicated that you would explore a variety of channels for business growth. During the Series A round, investors aren't looking to finance further experimentation. Instead, they want to hear your plan for driving substantial business growth. Once you are clear and specific about what you can do to accomplish this, then you'll be ready to have the conversation that Series A investors want to have.

Angel investors vs. other types of investors

Before pursuing funding from angel investors, familiarise yourself with other types of startup investors. Here's an overview of investment options:

• Venture capitalists: Venture capitalists (VCs) are firms or individuals that invest in startups showing strong potential for growth, usually in exchange for equity. Unlike angel investors, they typically invest during the later stages of a startup's development, after the business has shown some market traction. VCs invest larger sums of money than angel investors and are usually more involved in the direction of the company. They seek substantial returns and typically have a more aggressive view toward scaling the business and achieving an exit within a specific timeframe.

• Seed funds: Seed funds are specialised VC funds that focus on early-stage investments, often before angel investment and larger VC rounds. They invest in startups that have moved past the conceptual stage and have a minimum viable product (MVP) or some initial traction.

• Incubators and accelerators: These programs support early-stage companies through education, mentorship and financing. Incubators focus most often on the initial development phase, helping entrepreneurs turn ideas into a viable business. Accelerators, on the other hand, look to scale up the growth of existing companies over a short period of time.

• Corporate investors: Some corporations invest in startups to access innovative technologies, enter new markets, or nurture strategic partnerships. These investors can offer ample resources, but they might seek more than just financial returns, such as an ownership stake in the technology or control over the company's direction.

• Crowdfunding: This involves raising small amounts of money from a large number of people, typically through online platforms. Crowdfunding can be a good option for startups that want to validate their product with a broad audience, interact with potential customers and raise funds without giving up equity or incurring debt.

• Government grants and subsidies: In some sectors – particularly those involving scientific research, clean technology, or social impact – government grants and subsidies can provide funding without diluting equity.

• Peer-to-peer lending and debt financing: Debt financing includes loans from financial institutions or peer-to-peer lending platforms. This type of financing is typically more challenging for early-stage startups to secure and it obligates a startup to repay the loan, with interest, but it doesn't dilute ownership.

• Family offices: High net-worth families often have private wealth management advisory firms, known as family offices, that directly invest in startups. These investors can provide substantial funding and might be interested in longer-term investments compared to traditional VCs.

• Angel groups and syndicates: Unlike individual angel investors, angel groups or syndicates pool resources to invest in startups. These groups can provide larger sums of capital and combine the expertise and networks of multiple investors.

Each type of investor offers different advantages, expectations and levels of involvement. Startups should carefully consider their stage of development, industry, funding needs and the kind of strategic relationships they want to grow before deciding which type of investor to work with.