A Playbook for Founders, Funders and Policymakers.

1
About the Author
Dr. Ola Brown is a seasoned
venture capitalist, second-time
fund manager, and an investor
in nearly 30 companies within
the healthtech and fintech
sector. Dr. Ola’s first fund
returned 25% internal rate of
return (IRR) to investors.
Dr. Ola founded Healthcap
Africa in 2020 to focus on venture capital investing
and infrastructure. To date, HealthCap has invested
in almost 20 startups in the fintech and healthtech
sectors with a total valuation of about $700m.
The companies in HealthCap’s portfolio have created
over a 1,000 jobs, operate in 10 countries across the
globe and have nearly a million users/customers.
Dr. Ola holds a Master’s degree in Finance
and Economic Policy from the University of
London, where she studied Microeconomics,
Macroeconomics, Financial Markets, Capital Markets,
Banking, Banking regulation, and IMF/Economic
policy and is currently pursuing a doctorate in
finance.

2 A Playbook for Founders, Funders and Policymakers.

Dedication
To God, the source
of all inspiration
and strength, to
my husband - my
constant supporter,
and to every founder
in Africa and across
the globe, this book,
“Journey to Series A” is dedicated to you.

May it serve as a beacon of hope and guidance on

your path to success. May it remind you that with
hard work, determination, and faith, all things are
possible.

Thank you for being part of this journey, and for

daring to dream big and make a difference in the
world.

A Playbook for Founders, Funders and Policymakers. 3

 Table of Contents
Introduction 05
What Is Series A Funding? 07
Alternatives To Raising A Series A Round 09
Series A Stats 15
Your Series A Funding Round Checklist 20
Fundraising Timeline 21
How To Build Your Investor Tracker 24
How To Create A Forwardable Blurb 27
Your Financial Records 35
Financial Modelling For Series A 37
Storytelling 40
Key Team Members To Involve In Your Series A Round 43
Series A Pitfalls 47
Finding Series A Investors 52
Conclusion 54
Series A Funding Round Cheat Sheet 56
Journey To Series A 57

4
 Introduction
HealthCap Africa is a
venture capital firm
that invests in pre-
Series A companies
across Africa in
the fintech and
healthtech spaces.
We are continually
involved in advising
our portfolio
companies leading
up to their Series A funding rounds. In this ebook, we
focus specifically on Series A funding rounds because
they represent a significant step up from the seed
round in the following ways:

a. More scrutiny of accounting and tax practices.

b. Increased board involvement and requests for
improved governance.
c. More extensive due diligence process.
d. Greater emphasis on customer and contract
information.
e. Higher expectations for office functions like human

A Playbook for Founders, Funders and Policymakers. 5

Introduction

resource policies.
f. Strict reporting standards.
g. More complex contracting terms.
h. Valuation usually considers business fundamentals
such as margins, profitability, growth rate, and
churn rate.
i. Scrutiny of the quality of software, including
possible audits of code/UX and bug identification.
j. Greater emphasis on the financial model and
growth predictions/milestones that the company
intends to achieve.

6 A Playbook for Founders, Funders and Policymakers.

 What is Series A Funding?

Series A financing (also known as a Series A round or

Series A funding) is one of the stages in the capital
raising process for a startup. It is usually equity-
based. Series A differs from seed and pre-seed in that
there typically needs to be some kind of traction,
whether it is the number of users, revenue, views, or
other milestones/key performance indicators (KPIs).

A Playbook for Founders, Funders and Policymakers. 7

What is Series A Funding?

The Founder Institute

Startup Funding Requirements and Milestones

Stage Pre-Seed Seed Series A

Traction Customer Validation Product-Market Fit Expansion

Growth Rate 0 - 20% MoM 15% - 30% MoM 25%+ MoM

Monthly Revenue $0 - $75k $75k - $200k $200k+

Team Size 2+ 10+ 20+

Product MVP Robust Commercial

F&F, Seed Accelera-

Seed Accelerators, Series A/ Growth VC
tors, Angels,
Investors Angels, Seed VC Funds,
Pre-Seed/ Micro VC
Funds Existing Investors
Funds

Round Size $25k - $750k $750k - $4m $4m+

Company Valuation $1m - $5m $5m - $12m $30m - $60m

SAFE/ Convertible
Investment Vehicle Priced Round Priced Round
Note

8 A Playbook for Founders, Funders and Policymakers.

Alternatives to Raising a Series A Round

The Series A journey is a significant step up from

the seed round, and it usually requires a significant
commitment of time and giving away more equity/
control in the company. However, some alternatives can
be considered.

A. Customer funding:
Professor John Mullins from the London Business School
argues that if you can find enough customers who will
pay you good money (ideally in advance) for the solution
to their problems, you’re in the process of creating and
you won’t need to raise capital anywhere else.

A Playbook for Founders, Funders and Policymakers. 9

Alternatives to Raising a Series A Round

Customer funding means

obtaining funding for a
business from customers.
For example, technology
companies that have
raised little or no funding,
such as Zoho Books and
Mailchimp.

B. Venture debt:
According to the
Corporate Finance
Institute, venture debt is
a type of debt financing
obtained by early-
stage companies and
startups. This type of
debt financing is typically
used as a complementary method to equity financing.
Venture debt can be provided by both banks specialising
in venture lending and non-bank lenders. Venture debt
is non-dilutive and can be used to provide financing for
cash-flowing businesses.

10 A Playbook for Founders, Funders and Policymakers.

Alternatives to Raising a Series A Round

C. Bridge round / Seed extension round:

In the context of venture
capital, a “seed extension
round” and a “bridge
round” are two different
types of fundraising
rounds that a startup
company may pursue to
secure additional funding.

A “seed extension round”

is a fundraising round that occurs after a startup’s initial
seed round of financing, but before the company has
achieved significant traction or revenue. This type of
round is typically used to extend the startup’s runway, or
the amount of time it has before it needs to raise more
money or achieve profitability.

Seed extension rounds are typically smaller than later

stage funding rounds. They may involve the same
investors who participated in the initial seed round,
or new investors who are interested in the company’s
potential.

On the other hand, a “bridge round” is a fundraising

round that occurs when a startup needs additional
funding to bridge the gap between its current financing

A Playbook for Founders, Funders and Policymakers. 11

Alternatives to Raising a Series A Round

and its next funding round. This type of round is typically

used to provide short-term capital to help the company
achieve certain milestones or to continue operations
until it can raise more substantial funding.

Bridge rounds can be structured as debt or equity

financing and may involve new investors or existing
investors who want to continue supporting the
company.

Overall, both seed extension rounds and bridge

rounds can be valuable tools for startups to secure the
additional funding they need to continue growing and
achieving their goals.

D. Crowdfunding:
If your product has a large community of fans, then
running a crowdfunding campaign may be a great
alternative to raising a Series A.
In February 2022, Substack, a newsletter platform,
successfully raised over $65 million through
crowdfunding from its community, within a short span
of time. The crowdfunding campaign was open to all
Substack users, with a minimum investment of $100.
Substack also offered a discount on the company’s

12 A Playbook for Founders, Funders and Policymakers.

Alternatives to Raising a Series A Round

subscription fees to investors who participated in the

funding round. The campaign was oversubscribed, with
demand exceeding the amount of funding available.

By offering its users a chance to invest in the company,

Substack was able to tap into this community and give
them a sense of ownership in the platform’s success.
This approach is seen as a win-win for both the company
and its users, as it aligns the interests of both parties and
helps ensure the platform’s long-term success.

A Playbook for Founders, Funders and Policymakers. 13

Alternatives to Raising a Series A
Round

Customer Funding

1
Customer funding means obtaining funding
for a business from customers. For example,
technology companies that have raised little
or no funding, such as Zoho Books and
Mailchimp.

Venture Debt

2
This type of debt financing is typically used
as a complementary method to equity
financing. Venture debt can be provided by
both banks specialising in venture lending
and non-bank lenders.

Alternat i v es t o
R aising a Ser i es A

A Summary Bridge/Seed Extentions Round

3
A seed extension round occurs after a startup's
initial seed round of financing, while a bridge
round occurs when a startup needs additional
funding to bridge the gap between its current
financing and its next funding round.

Crowdfunding

4
Crowdfunding may be a great
alternative to series A if your product
has a large community of fans.

14 A Playbook for Founders, Funders and Policymakers.

Series A stats

This chapter focuses on the numbers collected by

ecosystem players from across the world that may serve
as a guide for founders and investors when thinking
about what to expect for a Series A round.

Some of these numbers are from the African ecosystem,

but many are not. Therefore, it is important to
understand that the African ecosystem is less mature,
and not all the statistics in this section will be applicable.

A Playbook for Founders, Funders and Policymakers. 15

16
Series A stats

Pre-seed, Pre-Series A & Seed Series A Series B Series C Series D

% Share 66% 23% 7% 2% 2%

Total amount >$56m >$200m >$150m >$22m >$95m
raised

Ecosystem

Egypt South Africa Kenya Ghana South Africa

Nigeria Nigeria Nigeria Kenya Egypt
South Africa Egypt Egypt
Kenya KenyaI Ghana
Tunisia Ghana
LOCA
TOP LOCATIONS

African Startup Funding

Landscape • Oct,2020 Powered by: Startuplist Africa

A Playbook for Founders, Funders and Policymakers.

Series A stats

• A study of 1,700 US-based deals over the past six

years found that Series A is the most common
acquisition point for startups. Approximately 30% of all
acquisitions took place at Series A.
Source - Carta

• Series A investors typically purchase 10% to 30% of the

company.
Source: Inc

• Startups usually have between 11 and 60 employees at

Series A.
Source: Sifted

A Playbook for Founders, Funders and Policymakers. 17

Series A stats

• 60% of startups fail between pre-seed and Series A

funding stages.
Source: SPD Load

• Not all startups that raise a seed round go on to raise

a Series A, but after raising a seed round, the average
time until a startup raises a Series A is 22 months.
Source: Teal

• Companies raise nearly three rounds on average prior

to Series A.
Source: Tech Crunch

• Less than 10% of startups that receive seed funding go

on to raise capital in Series A.
Source: Core Signal

• Approximately 25% of companies that raise a seed

round successfully raise a Series Around.
Source- CB Insights report on Seed-to-Series

• African startups that successfully raise a Series A round

typically have a higher valuation than startups in other
regions at a similar stage.
Source: Briter Bridges

• The most common sources of pre-Series A funding for

African startups are angel investors and seed funds.
Source: Digest Africa

18 A Playbook for Founders, Funders and Policymakers.

Series A stats

• African Series A rounds are typically led by

international investors, with 62% of all Series A rounds
in 2020 including at least one international investor.
Source: Disrupt Africa

• 45% of seed startups in 2017 have not raised another

round. 17% of 2017 seed startups have reached their
Series B, with 2% to Series D so far.
Source: Carta

A Playbook for Founders, Funders and Policymakers. 19

Your Series A funding round checklist

20 A Playbook for Founders, Funders and Policymakers.

 Fundraising Timeline

Networking with As soon as seed

potential investors is closed

• Investors wishlist
• Speak to team
• Start working on 18 Months
compliance

• Hire consultants where

necessary
15 Months • Begin to collate documents
for data room and initial
iterations of deck

Data room offsite 13 Months

meeting

• Deck and data room

should be completed
12 Months • Firm list of prospective
investors
• Start investor road show
• Track each investor’s
interaction
• Follow up with each 10 Months
prospective investor
• Expect to close in 6-12
months from this point

A Playbook for Founders, Funders and Policymakers. 21

Your Series A funding round checklist

A. Fundraising Process

The Series A fundraising

journey starts when you
close your seed round. It
is crucial to pay attention
to how you treat your
seed investors, as this is
significant and sets the foundation for your Series A
fundraising journey.
It is important to maintain a positive relationship with
your seed investors by providing regular updates and
staying in constant communication with them. It is also
beneficial to request their assistance in connecting
you with other potential investors, inviting you to
conferences, gatherings, and meetups where you can
network with additional investors. The primary objective
of these efforts is to ensure that you begin building
connections and establishing the right network right
after concluding your seed funding round.

Familiarise yourself with your Series A investors, seek

introductions, foster relationships and potentially include
them in your newsletters if they grant permission, so that
they can stay informed about your progress.

22 A Playbook for Founders, Funders and Policymakers.

Your Series A funding round checklist

It is essential to treat your existing investors well because

during the due diligence process for your Series A
funding, your Series A investors will likely approach
your original seed and pre-seed investors first. Thus, the
journey towards Series A commences as soon as the
seed stage ends.

Your fundraising process should be planned strategically

when you still have at least 12 months of runway left.
Start by creating a “Wishlist” of all investors that you
would like to potentially invest in the round (The ideal
number should be at least 50), then continue the process
by reaching out to existing investors for two reasons:

a. For them to review your deck and fundraising

documents like your model, allowing them to make
suggestions.
b. For them to make introductions to prospective
investors.

Ensure all your fundraising materials are complete and

comprehensive before reaching out to any investor,
and to keep the process “tight” after meetings, send
out summary emails with next steps immediately.
Build a tracker with all prospective investors. Note
the details of all conversations and dates for follow
up. Get introductions from current investors, friends,
conferences and other founders.
A Playbook for Founders, Funders and Policymakers. 23
 HOW TO BUILD YOUR
INVESTOR TRACKER
Name of Stage of Date for Interesting
investor conversation follow-up facts

This should contain

This should contain
the highlights of
the name of the
the most recent
VC fund or your
conversation with
specific contact. This is a
investors.
miscellaneous
This should
column for extra
communicate the
facts; whether it
follow-up date for
is a viable lend,
the next meeting or
updates, and lead
email.
date for the next
meeting.

Software to use?
Microsoft Excel and Google Sheets
work fine. But you may also want to
try CRM software.

24 A Playbook for Founders, Funders and Policymakers.

Your Series A funding round checklist

Crafting a forwardable blurb

When you’re fundraising,
one of the most
important assets you
should create as a founder
is a forwardable blurb,
which your referrer can
pass along in about two
seconds.

Crafting a compelling and forwardable blurb for

a Series A funding round can be a crucial factor in
attracting potential investors and generating interest in
your company. Here’s how you can go about it:

1. Start with a simple request for the referrer in the first

section.
2. Share a quick explanation of what your company
does, and the problem it solves. For example:
“Introducing xyz limited, a cutting-edge technology
startup revolutionising the healthcare sector with its
innovative telemedicine platform.”
3. Showcase significant milestones and achievements
your company has attained to demonstrate market
validation, user adoption, revenue growth, or other
notable metrics.

A Playbook for Founders, Funders and Policymakers. 25

Your Series A funding round checklist

4. Flex your team. Investors want to know that they’re

backing a capable and experienced team. Highlight
your team’s background, qualifications, and
achievements to build confidence in their ability to
execute on your company’s vision.
5. Sharing additional context and call to action. Your
blurb should end with a teaser deck (if you have one),
and a clear call to action that encourages investors to
learn more about your company. Provide a link to your
website or a contact email for investors to reach out to.
Overall, a well-crafted blurb for a Series A funding round
should be concise, compelling and forwardable. It should
clearly communicate your company’s value proposition,
traction, and team expertise, and encourage potential
investors to take the next step in learning more about
your company.

26 A Playbook for Founders, Funders and Policymakers.

How To Create A Forwardable Blurb

1 Start with a simple request

for the referrer

Share a quick explanation of

2 what your company does,

and the problem it solves.

Showcase significant

3 milestones and achievements

your company has attained to
demonstrate market validation.

Showcase your team’s

4 background, qualifications,
and achievements.

5 Share additional context

and a call to action.

A Playbook for Founders, Funders and Policymakers. 27

Your Series A funding round checklist

B. Communication with Employees

During the fundraising
process, you may have to
take some time off day-to-
day operations. Therefore,
it is important to explain
to key stakeholders in
the company that they
may need to be involved
in the fundraising as well as the fact that the Founder(s)
may need to focus on fundraising so the management
team may have to take responsibility for some more of the
operational heavy lifting during the process.

C. Compliance
Tax, staff HMO/
insurance, staff
pensions, employment
contracts, minutes of
board meetings, and
other statutory legal
policies should all be
reviewed and regularised,
if necessary, before going into a Series A funding

28 A Playbook for Founders, Funders and Policymakers.

Your Series A funding round checklist

process. You may want to

consider getting your latest
accounts audited by a brand
name “Big 4” auditor like
PricewaterhouseCoopers
(PwC), Ernst and Young (EY
Nigeria), or Deloitte Nigeria,
although this isn’t necessary.

D. Your Data Room

DATA ROOM AT A GLANCE

Corporate Financial Business Market

documents statements plan analysis

Due
Capitalisation Product Permits and
diligence
table roadmap licenses
materials

Sales & Board and

Management Intellectual
marketing shareholder
team profile property
strategy materials

Any
Employee Customer potential
Patents
information feedback legal risks or
liabilities

A Playbook for Founders, Funders and Policymakers. 29

Your Series A funding round checklist

A “Series A” data room is a secure online repository

where investors can access all the important documents
related to a company’s financing round.
When raising Series A funding, a company should create
a data room to share with potential investors.
The purpose of a data room is to create a space that
contains all the documents required for a potential

30 A Playbook for Founders, Funders and Policymakers.

Your Series A funding round checklist

investor to conduct due diligence and information

that provides a comprehensive view of the company’s
operations, financial performance and potential growth
opportunities.
Keeping all documents neatly arranged, correctly filed,
and uniformly formatted in your data room is essential.
Your virtual data room can be created with Microsoft/
Google Drive or a specialist software program. Examples
include: Box, Firmex, Caplinked and many more.
Some of the key items that a company should include in
its data room are:
• Corporate documents: This includes legal documents
such as the certificate of incorporation by laws and
shareholder agreements as well as any regulatory
filings and licences.
• Financial statements: This includes audited financial
statements for the past few years as well as current
financial statements that show the company’s
financial performance to date.
• Business plan: This includes a detailed business plan
that outlines the company’s vision, mission, goals, and
strategies for achieving growth and profitability.
• Market analysis: This includes a detailed analysis
of the market opportunity, including market size,

A Playbook for Founders, Funders and Policymakers. 31

Your Series A funding round checklist

growth potential, competitive landscape and target

customers.
• Capitalisation table: This is a detailed breakdown of
the company’s ownership structure, including the
names of all shareholders and the percentage of
shares they own.
• Due diligence materials: This includes any material
related to due diligence conducted by the company
or its advisors such as reports from consultants or
auditors.
• Product road map: This includes a detailed roadmap
of the company’s products and services as well as any
plans for future product development.
• Permits and licences: This includes any permits or
licences required for the company’s operations, such
as business licences, environmental permits and
regulatory approvals.
• Sales and marketing strategy: This includes a detailed
overview of the company’s sales and marketing
strategy, including target customers, channels, and
tactics for acquiring and retaining customers.
• Board and shareholder materials: This includes any
board meeting minutes, shareholder meeting minutes
or resolutions passed by the board or shareholders.

32 A Playbook for Founders, Funders and Policymakers.

Your Series A funding round checklist

• Management team profile: This includes bios of the

company’s management team, highlighting their
experience, qualifications, and track record of success.
• Intellectual property: This includes patents,
trademarks, copyrights, or any other intellectual
property that the company owns or has licensed.
• Employee information: This includes information
on the company’s employees, such as their roles,
compensation and benefits, organisational charts,
job descriptions, and employee handbooks. It should
also include any equity incentive plans or stock option
agreements.
• Any potential legal risks or liabilities: This includes any
potential legal risks or liabilities that the company may
face, such as pending lawsuits or regulatory issues.
• Customer feedback: Any record of NPS goals, videos
of happy customers giving feedback or written
testimonials should be included in the data room
because they show investors that the company has
products that make customers happy.
The data room should be well-organised, easy to
navigate, and should provide investors with the
information they need to make informed decisions
about investing in the company.

A Playbook for Founders, Funders and Policymakers. 33

Series A Funding Round Checklist
Fundraising Process
∆ Investor tracker/wishlist
∆ Forwardable blurb prepared
∆ Pitch deck prepared
∆ Financial model prepared
∆ Meetings with existing and
potential investors
∆ Summary emails after
meeting
∆ Communication with
Employees
Communication with Employees
∆ Regular meetings
∆ Brainstorming sessions
Data Room
∆ Corporate documents
∆ Financial statements
∆ Business plan
∆ Market analysis
∆ Capitalisation table
∆ Due diligence materials
∆ Product roadmap
∆ Permits and licences
∆ Sales and marketing strategy
∆ Board and shareholder
materials
∆ Management team profile
∆ Intellectual property
∆ Employee information
∆ Any potential legal risks or
liabilities
∆ Customer feedback
Compliance
∆ Certificate of Incorporation
∆ Articles of Association
34 A Playbook for Founders, Funders and Policymakers.
∆ Business plan
∆ Corporate governance
documents
∆ Minutes of board and
shareholder meetings
∆ List of current and former
directors and officers•
∆ Register of members
∆ Register of directors and
secretaries
∆ Share certificates
∆ Register of charges and
debentures
∆ Register of mortgages and
charges
∆ Financial statements
∆ Tax returns and tax
compliance records
∆ Accounting records and
ledgers
∆ Bank statements and other
financial records
∆ Insurance polices
∆ Intellectual property
document
∆ Regulatory property
documents
∆ Employment contracts and
personnel records
∆ Environmental compliance
documents
∆ Litigation and dispute
resolution documents
∆ Confidentiality and non-
disclosure agreements
∆ Data privacy policies and
procedures
Your financial records

This is the aspect of your business that will receive the

most scrutiny, so it’s important that these records are
unquestionably accurate.
You will need all your monthly financials from inception
to date, and:
a. They must be prepared using the accrual basis
of accounting and reported according to the
International Financial Reporting Standards (IFRS).
b. They must be comprehensive, complete with a cover
page, balance sheet, profit and loss statement, cash

A Playbook for Founders, Funders and Policymakers. 35

Your financial records

flow statements, and summary sheets for every single

month since the company started.
c. These statements should link back to the original
ledger on the same Excel sheet and your revenue
streams should be categorised according to your chart
of accounts.
d. Your annual audited accounts, tax filings, contracts
with clients and pension deductions, where relevant,
must be presented alongside your accounts.

36 A Playbook for Founders, Funders and Policymakers.

Financial modelling for Series A

When raising Series A funding, a company’s financial

model should provide a detailed and realistic projection
of the company’s financial performance over the next
few years.

Some key components that should be included in the

financial model are:
a. Revenue projections: The financial model should
provide a detailed projection of the company’s

A Playbook for Founders, Funders and Policymakers. 37

Financial modelling for Series A

revenue, broken down by product or service offerings,

customer segments, and geographic regions. These
projections should be based on realistic assumptions
about market size, competition, pricing, and sales and
marketing strategies.
b. Cost projections: The financial model should
provide a detailed projection of the company’s costs,
including direct costs (such as production costs and
materials) and indirect costs (such as salaries, rent,
and utilities). These projections should be based on
realistic assumptions about the company’s growth and
expansion plans.
c. Profit and loss statement: The financial model should
include a detailed profit and loss (P&L) statement,
which shows the company’s revenue, costs and net
profit over the projected period. The P&L statement
should be based on realistic assumptions and take into
account any potential risks and uncertainties.
d. Cash flow statement: The financial model should
include a detailed cash flow statement, which shows
the company’s inflows and outflows of cash over the
projected period. The cash flow statement should
take into account the company’s operating activities,
investing activities, and financing activities.

38 A Playbook for Founders, Funders and Policymakers.

Financial modelling for Series A

e. Capital expenditure projections: The financial model

should include projections for the company’s capital
expenditures, which are investments in long-term
assets such as equipment, machinery, and facilities.
These projections should be based on the company’s
growth and expansion plans and take into account any
potential risks and uncertainties.
f. Sensitivity analysis: The financial model should
include a sensitivity analysis, which shows how
changes in key assumptions (such as revenue growth
rate, gross margin, or market size) would impact the
company’s financial performance. The sensitivity
analysis can help investors understand the potential
risks and uncertainties associated with the company’s
financial projections.

A Playbook for Founders, Funders and Policymakers. 39

Storytelling

Before anyone looks at your financials, they will listen to

your story. This will spark an investor’s initial interest. You
should prepare two decks:
1. A teaser of fewer than six (6) slides.
2. A longer pitch deck.
Your story should be explicitly explained and backed by
the numbers of products you will need to sell to get from
where you are now to unicorn status.

40 A Playbook for Founders, Funders and Policymakers.

Storytelling

Here are some important things for founders to bear in

mind when crafting their story:
• Focus on the problem and the solution: The story
should highlight the problem the startup is solving
and the unique solution it offers. Founders should
clearly articulate the pain points their customers face
and how their solution solves those problems in a
better way than the competition.
• Highlight traction and progress: Founders should
demonstrate the progress the startup has made
since its inception, highlighting metrics like customer
acquisition, revenue growth, and user engagement.
Investors want to see that the startup has a clear path
to sustainable growth and profitability.
• Articulate the market opportunity: Founders should
clearly define the market opportunity for their product
or service, including its potential size, growth rate and
target audience. Investors want to see that the startup
is addressing a significant market with a clear path to
capturing a meaningful share of it.
• Emphasise on the team: Investors invest in people as
much as they invest in products or services. Founders
should highlight the strengths and experience of the
team, demonstrating that they have the skills and
expertise to execute their vision.
A Playbook for Founders, Funders and Policymakers. 41
Storytelling

• Be transparent: Honesty and transparency are critical

when crafting a story for a Series A capital raise.
Founders should be upfront about their challenges
and how they plan to overcome them as well as
any risks associated with the business. Overall, a
compelling story for a Series A capital raise should
clearly articulate the problem the startup is solving,
demonstrate traction and progress, define the market
opportunity, emphasise the team and be transparent
about challenges and risks.

42 A Playbook for Founders, Funders and Policymakers.

Key team members to involve in your
Series A round

This chapter discusses the key team members that

should be involved in your Series A round, which include:
head of sales/marketing, head of human resources, head
of finance, lead engineer, head of product and chief of
staff.
Keeping key members of your leadership team abreast
of fundraising efforts is important for two main reasons:
1. They will be populating the data room with documents
from their departments.

A Playbook for Founders, Funders and Policymakers. 43

Key team members to involve in your Series A round

2. They will be interviewed by prospective investors

during the due diligence process to assess key man
risk.
These are some of the team members that should be
briefed on a periodic basis about the fundraise. Although
it is important to find a balance between working
towards the fundraise and ensuring that the company
continues to growth through the duration of the
fundraise.
• Head of Sales/Marketing: The head of sales/ marketing
is important because projects will be made in the
financial model, and presented to investors. Your
Head of Sales or growth will need to be able to explain
to investors how they intend to meet those targets.
Furthermore, contracts with suppliers and customers
will be required from this team alongside their systems
and process documents. These can either be physical
documents or videos recorded on software like Loom.
• Head of Human Resources: The head of human
resources will be required to submit HMO, pension
and employment contracts. Also investors may ask
your Head of HR what talent the Series A funding will
be used to recruit and details about the recruitment
process.

44 A Playbook for Founders, Funders and Policymakers.

Key team members to involve in your Series A round

• Head of Finance: Your head of finance or CFO is

absolutely critical to the fundraising process and
functions as the centre of your Series A effort. Your
finance team will be required to submit statements
of account, audit records, tax records, projections,
financial models, ratio analyses etc. This team member
will work alongside the founders or CEO to answer all
the tough questions during financial due diligence of
which there will be many.
In a large company there are separate teams,
sometimes of twenty or more people that specialise
specifically in tax, FP&A, treasury, accounts receivable,
accounts payable etc. For example, in a large listed
Nigerian company, a head of tax, led by a specialist
who has a PhD or MSc in tax has a team of 15 or more
people working on just tax issues for the company. In
a small company, all these different areas of expertise
are expected from one or two people.
Do your best to make sure they are upskilled enough to
speak to every area of finance as regards the company.
Lead Engineer: Due diligence for Series A often
requires a code or software audit. So you will need your
lead engineer on hand to answer technical questions
about your proprietary software.

A Playbook for Founders, Funders and Policymakers. 45

Key team members to involve in your Series A round

• Head of Product: Your head of product will talk to your

prospective investors through the product pipeline as
well as work to demo your product alongside your lead
engineer.
• Chief of Staff: Your chief of staff will be like an octopus.
Some days taking on an investor relations role, some
days liaising with other team members to populate the
data room and support with due diligence.

46 A Playbook for Founders, Funders and Policymakers.

Series A pitfalls

Some of the pitfalls that founders can fall into when

raising Series A are: low or no budget, poor financial
record keeping, ugly data room documents, not
allocating the correct amount of time, unprepared team
members and unprepared founders.
1. Low or no budget: Raising money costs money,
especially when it comes to Series A so budget
accordingly for consultants, auditors, graphic
designers, and financial modelling experts.

A Playbook for Founders, Funders and Policymakers. 47

Series A pitfalls

2. Poor financial record keeping: Series A investors will

want to see your management accounts from the
inception of your company.
This means all three financial statements namely:
i. Profit and loss statement
ii. Balance sheet
iii. Cash flow statements
You must have these for every month that your company
has been in operation. These statements must link back
to your original ledger and must tally with your bank
statements which may also be requested during the due
diligence process.
You should not attempt to go into a Series A fundraising
process without this. It will ruin your relationship with
prospective investors making your company look
unprepared.
3. “Ugly”data room documents: All documents in your
data room must be neatly arranged and categorised.
Take the time to ensure that documents are also
aesthetically pleasing to look at. Engage a graphic
designer if necessary to ensure that even down to
contracts and policy documents, your paperwork is
visually appealing.
4.Not allocating the correct amount of time: This

48 A Playbook for Founders, Funders and Policymakers.

Series A pitfalls

process can take a year or more, so don’t start it

when you only have three weeks of runway left. The
preparation process should start early and always
estimate it will take longer than you expect.
5. Unprepared team members: Start upskilling your
team members early in your journey to Series A, in
particular, your accounting and finance team.
6. Unprepared founders: Before sharing the link to
your data room with any investors, it is important to
call together every single person that worked on any
aspect of the project, especially the financial model,
your projects, your monthly financials, and auditors.
You can call it a data room offsite, a data room retreat
or a data room workshop. The term used to refer to it
may not be significant, but the topics covered in that
meeting are crucial.
As a founder you must know every single document
in the data room. So ask each individual to present the
details of what they contributed. The important part
is to have them grill you. If possible, the team you are
bringing together should have secretly developed a
list of about thirty questions to ask you. The trickier the
better!
This will help you realise what you don’t know and go
back to the drawing board on things that you thought
A Playbook for Founders, Funders and Policymakers. 49
Series A pitfalls

you knew.
It looks EXTREMELY bad if a junior analyst at a VC firm is
asking you questions about your own company that you
can’t answer.
During the fundraising process, investors will want to
ascertain the level of key man risk in your company,
so they will almost definitely want to have one on
one meetings with key leaders like your Head of
Human Resources, your Head of Operations and most
importantly, your Head of Finance.
Ensure that investors are familiar with the fundraising
process, as well as the documents in the data room that
are relevant to their departments.

50 A Playbook for Founders, Funders and Policymakers.

Series A Pitfalls
1. Low or no budget
2. Poor financial record keeping
3. “Ugly” data room documents
4.Not allocating the correct amount of time
5. Unprepared team members
6. Unprepared founder

A Playbook for Founders, Funders and Policymakers. 51

Finding Series A investors

While at pre-seed and seed, your company could have

been funded by friends, family and angels. Your Series A
round will almost certainly, unless you have very rich
friends, be funded by institutional venture capital firms,
family offices and maybe even development finance
institutions. This means that your network of investors
must be strong before going into the process.
There is a Harvard Business Review quote that says “ The
best time to build your network is before you need it, the
best time to keep that network strong is always.” This
definitely applies to Series A fundraising.

52 A Playbook for Founders, Funders and Policymakers.

Finding Series A investors

These are the most effective methods of outreach to

investors that we have seen:
1. Introductions from your existing investors
2. Introductions from other founders
3. Introductions from friends/colleagues
4. Meetings at conferences
5. Cold outreach

A Playbook for Founders, Funders and Policymakers. 53

Conclusion

In summary, raising a Series A round is a significant

milestone for any startup and it requires careful planning
and preparation to ensure success. From building a
strong data room to crafting a compelling story and
financial model, founders need to consider many factors
when preparing for a Series A round. However, the effort
is worth it.
A successful Series A round can provide the capital and
resources that a startup needs to take its business to the
next level, drive growth, expand its customer base and
achieve its vision for the future.

54 A Playbook for Founders, Funders and Policymakers.

Conclusion

At Healthcap Africa, we have seen first hand the

transformative power of Series A funding for startups
in the fintech and healthtech spaces across Africa. We
believe that by providing the right support, advice, and
resources to founders during the Series A fundraising
process, we can help them achieve their goals and build
successful, sustainable businesses that make a positive
impact in their communities and beyond.
If you are a founder preparing for a Series A round, we
encourage you to take the time to plan and prepare for
the process carefully. Seek out advice and guidance from
experienced investors and advisors and be transparent
and honest throughout the process. With the right
preparation and mindset, you can successfully navigate
the Series A fundraising process and take your startup to
the next level.
This is not an exhaustive summary of everything that
founders need to consider and prepare when beginning
the process of raising a Series A round. However, it covers
some of the essential elements. We wish you the best
of luck on your journey and look forward to seeing the
amazing things that you and your team will accomplish
in the years ahead!

A Playbook for Founders, Funders and Policymakers. 55

 SERIES A FUNDING ROUND
CHEAT SHEET
Your Series A Funding Pitfalls To Avoid
Round Checklist Low or no budget Unprepared team members
Poor financial record keeping Unprepared founders
Fundraising Process
Ugly” data room documents
Communication with Employees Not allocating the correct
Compliance amount of time
Your Data Room

Crafting Your Story Key financial Model Components

Focus on the problem and the solution
Cost projections Revenue projections Cash flow statement
Highlight traction and progress
Articulate the market opportunity Capital expenditure
Emphasise on the team Profit and loss statement projetions Sensitive analysis

Be transparent

Your Financial Records Crafting A Forwardable Blurb

Start with a simple request for the referrer
Must be prepared using the accrual basis of
Share a quick explanation of what your company does
accounting, and reported according to the IFRS.
Showcase significant milestones and achievements
Must be comprehensive, complete with a cover page.
your company
balance sheet, profit and loss statement, cosh flow
Flex your team
statement, and summary sheets for every single
Sharing additional context and call to action.
month since the company started.

Should link back to the original ledger on the same

Excel sheet, and your revenue streams should be
Your Series A Data Room At
categorised according to your chart of accounts. A Glance
Your annual audited accounts, tax filings, contracts
Corporate documents Sales and marketing strategy
with clients, and pension deductions, where relevant,
Financial statements Board and Shareholder
must be presented alongside your accounts
Business plan Materials
Market analysis Management team profile
Capitalization table Intellectual property
Alternatives To Series A Chief of Staff Employee information
Due Diligence Materials Any potential legal risks or
Customer funding
Product roodmop liabilities
Venture debt
Permits and licences Customer feedback
Bridge round/Seed extension round
Crowdfunding Most Effective Methods
Of Outreach To Investors
Introductions from your
Key Team Members To Involve In Your existing investors

Series A Round Introductions from other

founders

Head of Sales /Marketing Introductions from

friends/colleagues
Head of Human Meetings of conferences
Head of Finance Lead Engineer
Resources

Head of Product Chief of Staff

56 A Playbook for Founders, Funders and Policymakers.

Journey To Series A
Close off seed
round

Create wishlist
of investors
Inform team Avoid pitfalls
Collate compliance
document

Prepare pitch deck

Build Financial model

End of series A
Collate documents in data room round

Conclude target list of investors

A Playbook for Founders, Funders and Policymakers. 57