Series A is the first round of financing, which mainly comes from angel investors and venture capital companies. At this stage, investors usually do not consider just “great ideas”, but are looking for startups with a reliable business strategy. In this round, it is important to have a plan for developing a business model that will bring long-term profit. The average Series A Funding Amount in 2021 is currently at around $21.8 million.
A startup on the eve of Series A does not yet have confidence confirmed by numbers, so it still carries high investment risk. Statistics show that the odds in favor of obtaining seed funding are 1:40, while in favor of Series A funding is 1:400. The stakes are high. CB Insights found that “almost 67% of startups stop at some point in the venture investment process and are unable to exit or attract additional funding”.
The main evaluation criteria that investors use to evaluate a startup are the quality of the management team, scalable business model, prototype, launch plan, market entry strategy, economic efficiency, flexibility, and speed of development.
One of the most successful startup growth strategies for scaling is outsourcing. How exactly outsourcing can help startups reach the stage of the Series A rounds, we will tell in this article.
Scalable business model
The business model should demonstrate the potential to increase revenue with minimal expenses in the coming months or years, the business idea itself should be scalable. IT outsourcing gives access to talents and an expert team that will help save man-hours, as well as time to find the right specialists. It will also prepare the infrastructure for increasing capacity and rapid growth.
Access to innovations
Outsourcing gives full access to the rapid introduction of new technologies for startups. First of all, it is the use of software and the latest automation technologies wherever it makes sense. This approach contributes to the creation of a scalable business model, which, in turn, helps to attract investors. In addition, outsourcing innovations will save time and money, which are critically important in the early stages of startup development. Right IT outsource partners are specialists in providing software solutions in accordance with the project, on time, and within budget. They have a lot of experience to avoid planning errors in the context of software development.
Expert team
Unlike the initial stage, at the Series A stage, investors are more concerned about the business scaling potential. Given the lack of technical talent, pre-selection, interviewing, testing, and taking steps to hire a person to find out if they have the skills to work in a project requires significant money, time, and effort. IT outsourcing makes it possible not to worry about the recruitment process for a startup, which is a great advantage for the company. For startups looking for Series A investors, increasing the number of employees in a company too early is simply not a winning business strategy.
Testing to a fully functional MVP
At the early stages of a startup, market testing is necessary with the help of a ready-to-scale MVP to confirm whether the chosen business model is economically feasible in conditions of uncertainty.
Usability testing is one of the most common methods of checking how useful your service or product is. This testing involves users from your target audience performing a number of tasks in a controlled scenario – for example, registering or making a purchase.
Launch
After an exhaustive testing stage, it is necessary to launch the product for real users, analyze the first user experience and configure the software. In addition to bringing the product to market, it is also necessary to properly promote it and analyze its performance.
Outsourced product marketing services include performance marketing, content marketing, search engine optimization, and etc. This will help to quickly promote the startup’s product so that it reaches the right audience with the right message
Post-launch maintenance
After the launch, our team will help you bring your product to market and implement the necessary updates.
Information technology audit is the verification and evaluation of information technology infrastructure, applications, data use and management, policies, procedures, and operational processes in accordance with recognized standards or established policies. Audits assess whether management tools for protecting information technology assets ensure integrity and whether they meet the goals and objectives of the company.
Conclusion
Outsourcing helps startups accelerate development, introduce innovations, integrate budget and personnel flexibility that are important at this stage into their business models, and enter the market faster. Such a strategic partnership ensures the creation of an adapted innovative product that the team can use and expand further as soon as the product receives some market valuation. Therefore, it is important that the IT outsourcing partner defines and creates a good and scalable technological infrastructure, applying the best development practices.
Outsourcing for a startup can help instill confidence in investors and maximize the use of the budget.
