What is Series B Funding: How to Raise & Scale Fast

Raising money is one of the biggest challenges startups face after their early wins. Getting from an idea to a working product is hard, but growing that product into a real business takes even more work—and more money.

Series B funding is not about survival. It’s about growth. Companies that reach this stage usually have paying customers, steady revenue, and signs that people want what they’re offering. But to grow faster—maybe to hire a sales team, expand to new markets, or upgrade their tech—they need serious investment.

Before this point, most startups go through Series A funding, which helps them build their product and prove there's demand. But Series B is a whole new level. It’s about scaling what’s already working.

According to Crunchbase, the average Series B round in the U.S. raised around $45 million in 2021, up nearly 50% from the year before. That’s a big jump from Series A. It shows just how much pressure there is at this stage to perform.

In this guide we'll breaks down what Series B funding is, how it works, and what investors want to see. You’ll learn how to get ready for it, what metrics matter, how to build your pitch, and what mistakes to avoid. We’ll also look at real companies that raised Series B—and what happened next.

If your startup is growing fast and you’re thinking about the next stage, this article will help you understand what Series B really involves.

Series B funding is the second major round of investment that a startup raises after Series A.

It usually happens when the company has found its product-market fit and wants to grow faster. This round helps the business expand its team, reach new customers, and increase revenue.

At this stage, the startup is no longer proving if the product works. That part was covered during Series A. Now, the focus is on building a repeatable system and growing the business in a bigger way.

Series B rounds are much larger than earlier stages. Most companies raise between $30 million and $60 million, though some raise more depending on their market and growth speed. According to Crunchbase, the average U.S. Series B round in 2021 was $45 million.

Investors now expect more. They want to see results—real traction, strong customer numbers, and clear signs of long-term success. They’re betting on a company that already works and just needs fuel to grow faster.

Startups raise Series B funding to grow faster after proving their idea works. At this stage, the basics are in place. The product is live, users are active, and revenue is coming in. But now the team needs more money to move to the next level.

One of the first things startups do with Series B money is grow their team. They hire experienced sales reps, marketers, customer support staff, and sometimes engineers. For example, a company with 20 employees might use this round to grow to 60 or 80.

With the new funding, companies often expand to new cities, countries, or regions. This might mean setting up a local office or hiring regional leads. A U.S. startup might launch in Europe, or a local brand could try going national.

Startups also use the money to boost their customer acquisition. They invest in digital ads, partnerships, events, and content. The goal is to grow faster by reaching more people. This is often the stage where paid marketing becomes a big focus.

As the customer base grows, the systems behind the product need to handle more users. Companies use funding to improve infrastructure, increase speed, and add features. This helps them keep users happy and reduce churn.

Series B is often a setup for Series C. Startups use this time to show stronger growth and cleaner metrics. This helps them raise their next round at a higher valuation.

In short, startups raise Series B to scale what’s already working. It’s about building a stronger business, reaching more users, and getting ready for bigger goals.

Series B rounds usually attract bigger and more experienced investors. At this point, the company has shown solid progress. It’s past the idea stage. There’s a working product, growing revenue, and early customer proof.

Most Series B rounds are led by venture capital firms that focus on growth-stage startups. These firms are different from early-stage investors. They look for companies that are ready to scale fast and can return bigger results. Well-known firms like Sequoia Capital, Accel, and Andreessen Horowitz often invest in Series B deals.

Some of the same investors from the Series A round join again. If they see progress, they often want to increase their share in the company. These repeat investors can also help bring in new ones by sharing data and vouching for the startup.

Some funds only invest at later stages. They come in when the business looks more stable. These investors expect cleaner numbers, lower risk, and a clear plan for making money. They are usually less involved in day-to-day advice but bring more capital.

Sometimes, companies in the same industry invest too. For example, a large tech company might back a fast-growing software startup. These strategic investors often bring partnerships, reach, or tools that can help the startup grow faster.

A few startups raise Series B funds through equity crowdfunding. This means offering shares to the public through online platforms. It’s less common, but some startups use it to raise money and build brand loyalty at the same time.

Before you start raising Series B, you need to show proof that your business is growing and ready to scale. Investors at this stage want real data. They’re no longer betting on a hunch. They want to see that your company is working—and can get much bigger.

This is one of the first things investors check. Your business should be making money and growing steadily. While numbers vary, many Series B startups have $1 million to $5 million in annual recurring revenue (ARR). What matters more than the amount is how fast it’s growing. For SaaS companies, year-over-year growth of 2x to 3x is a strong signal.

You need more than a few early users. Investors want proof that people are using—and paying for—your product. Show customer growth, retention, and satisfaction scores. Share feedback or testimonials if you have them. These help prove that the product is useful and people stick with it.

By Series B, you should have strong signs that your product solves a real problem. This could be shown by low churn, repeat usage, or referrals. If users keep coming back and bring others with them, that’s a green flag.

Investors want to see that your business can scale without burning too much cash. You should know your customer acquisition cost (CAC) and lifetime value (LTV). A good LTV-to-CAC ratio is 3:1 or higher. If your cost to get a customer is too high, it’s a warning sign.

By now, your founding team should be stronger. Many Series B startups have hired leaders in sales, marketing, product, and finance. Investors want to see that you’ve built a team that can handle growth. A strong leadership team builds trust.

It’s not just about the product—it’s about how big the market is. If you’re going to raise $30 million or more, investors want to know there’s a big market out there. Use real numbers to explain how many potential users or buyers exist.

Getting ready for Series B is about showing you’re ready to grow faster—and that you have a clear plan for it. Investors expect more at this stage. They want proof, not promises. So before you start pitching, you need to get your numbers, your story, and your team in shape.

Startups at this stage must have clean books. That means up-to-date profit and loss statements, cash flow reports, and a clear view of your burn rate. Investors will look at your runway, margins, and how money is being spent.

Set up a data room early with all key financials. Make it easy for investors to understand where the business stands today.

You need more than goals—you need a plan. Show how you’ll use the Series B funding to grow revenue, improve your product, and expand your team. Be specific. If you're going to double your sales team or launch in two new markets, say so. Include a timeline and expected results.

Your Series B pitch deck should reflect where you are now. It’s not about vision anymore—it’s about traction and scale. Focus on results, not just ideas. Include key metrics, customer proof, and how you’ll grow with this next round.

Good slides to include:

Keep it short, clear, and honest.

By this point, founders can’t do everything alone. Most successful startups bring in experienced leaders—a VP of Sales, a Head of Marketing, or a CFO. Investors want to see a team that can scale operations and handle more complexity.

Don’t wait until you need the money. Start talking to potential investors months before you plan to raise. Share updates, ask for advice, and stay on their radar. Investors are more likely to say yes if they’ve seen your progress over time.

Make sure your cap table is clean and clear. If there’s confusion around equity, ownership, or earlier agreements, solve those issues now. A messy cap table can delay or kill a deal.

A great Series B pitch deck is more than slides. It’s a clear message that your business is ready to scale. It shows what you've done, where you're headed, and why investors should trust you with their money.

At this stage, you're not just selling an idea. You're showing that the business is working—and now it's time to grow fast.

Here’s a detailed breakdown of what to include in your deck and how to get it right.

Your first slide should tell people what your startup does in one or two lines. It should also hint at your traction or growth.

This is the first thing investors see, and it should grab attention. Think of it as your elevator pitch on a slide.

What to include:

Example:

“We help small businesses run payroll in under 5 minutes. Since launching, we’ve grown to 1,400 paying customers and $3.5M in annual recurring revenue (ARR).”

This shows you’re not an early-stage startup—you’ve already figured things out and now you’re ready for more.

At Series B, investors want evidence that your business is growing. This means actual numbers, not just projections.

Your traction slide should highlight the most important business metrics. Make sure the data is current and clearly displayed with charts, graphs, or bullet points.

Include:

Tip: Use charts that show growth trends, not just raw numbers. A line that keeps moving up gives confidence.

Product-market fit means people want your product—and they keep using it. At Series B, investors want proof that you’re not guessing anymore. You know your customers, and they like what you offer.

How to show this:

You can also include Net Promoter Score (NPS) if it’s strong. Anything that shows happy, paying users helps you stand out.

Be clear about how you make money. If your pricing is subscription-based, show your price points. If it’s usage-based, explain how charges work. Don’t overcomplicate it.

Include:

Example:

“We offer 3 pricing tiers: Basic at $49, Growth at $99, and Pro at $149. 65% of users are on the Growth plan. Average customer pays $92/month.”

Investors want to know your model is simple, repeatable, and can scale.

This slide explains how you get new users. It also shows that you’ve found a working channel and now plan to scale it.

Key points to cover:

Example:

“Our CAC dropped from $380 in Q1 to $210 in Q3 after improving our paid search targeting. We plan to invest $1.5M into this channel to triple leads next year.”

This tells investors your growth plan isn’t based on luck. It’s based on data.

Investors back people. So use this slide to highlight your founders and key leaders. Focus on experience, past results, and skills that help you scale.

What to include:

Keep it clean. Just a name, role, headshot, and one-line track record for each person is enough.

Be direct. Tell investors:

Break down your use of funds:

Also, include a timeline of what this round will help you achieve in the next 12–18 months.

Example:

“With this raise, we aim to grow ARR from $3.5M to $10M in 18 months by expanding our team and launching in two new regions.”

This helps investors see what they’re funding—and what success looks like.

The best decks are clear, short, and honest. Don’t add fluff. Most decks perform best with 12–15 slides. Focus on traction, team, and growth plan.

Tips:

Your Series B pitch deck is a signal. It shows whether you're in control of your growth and ready for serious funding. A clear, confident deck makes that decision easier for investors.

Raising Series B funding is a big move. It takes time, planning, and clear communication. This isn’t a fast email blast or a quick pitch—it’s a full process that often takes 3 to 6 months from start to finish.

Here’s how the process works, step by step:

Start early. Most successful founders begin preparing 4 to 6 months before they actually raise.

Use this time to:

Ask yourself:

The better you plan, the fewer surprises you’ll face later.

Don’t reach out to everyone. Make a target list of 15 to 25 funds that invest in your stage and space. Look for:

Use platforms like Crunchbase, PitchBook, or Signal to research. Also, talk to your current investors for warm intros.

Best practices:

Don’t just pitch. Build relationships.

Once you get interest, it’s time for meetings. These usually start with a 30-minute call or video chat. If there’s interest, you’ll move to deeper follow-ups.

Be ready to:

You’ll also get feedback. Some investors might pass, others might ask to check back in. Use feedback to refine your pitch and tighten your story.

Pro tip: Keep a spreadsheet of who you’ve spoken with, what they asked, and what the next step is.

When an investor is interested, they’ll send a term sheet. This is a short document that outlines the key terms of the investment.

It usually includes:

This step moves fast. Once you receive a term sheet, you usually have 5–7 days to respond. Always involve your lawyer and financial advisor before signing anything.

After you sign the term sheet, due diligence starts. This is where investors go deeper into your company’s operations, finances, and legal setup.

You’ll need to provide:

They’ll look for anything that could pose a risk. Keep your data room organized to speed things up.

If all goes well, you’ll move to closing paperwork and finalize the investment.

Here’s a rough timeline for a full Series B raise:

This can go faster if you’re well-prepared and the market is hot. But always plan for delays.

Raising Series B funding is a big milestone, but it also comes with a new set of problems. Many founders face pressure, misalignment, or confusion during this stage. Knowing what to expect can help you stay focused and avoid delays.

Here are some of the most common hurdles—and how to deal with them.

Valuation is one of the biggest roadblocks in Series B talks. Founders often expect a number based on future growth, while investors base it on past results.

Why this happens:

How to handle it:

Example: A SaaS startup aiming for a $150M post-money valuation may face pushback if their ARR is under $5M. Adjusting expectations early can save time.

Series B investors aren’t just funding your next experiment. They expect results. They want you to use their money well and hit real targets.

What they expect:

How to handle it:

Meeting expectations builds trust—and makes it easier to raise your next round.

At Series B, the founding team usually needs help. You might be great at product, but now you need leaders in growth, sales, and finance.

Common gaps:

How to handle it:

Tip: Investors prefer seeing you acknowledge team gaps and plan to fix them—rather than pretending everything’s perfect.

With every new round, ownership gets split further. This can upset early employees or create tension with angel investors.

Problems you might face:

How to handle it:

A healthy cap table keeps your startup attractive to future investors.

Once the money hits the bank, expectations rise. You’ll need to move faster, report more often, and answer more questions.

What might change:

How to manage it:

Every Series B raise comes with some stress. But if you prepare early, stay transparent, and keep your team focused, you can get through these challenges—and come out stronger.

Raising Series B is a big win, but how you use the money matters just as much as getting it. Many startups make the mistake of spending too fast or hiring without a clear plan. Series B is about building systems that help you grow steadily—not just quickly.

Here’s how to make the most of your Series B funding.

Hiring more people sounds like the next step, but more headcount doesn’t always mean more output. Before you expand the team, make sure your internal systems can handle more users, customers, and data.

What this means:

Example: Instead of hiring 10 new reps immediately, invest in a better lead scoring system so the current team works smarter—not just harder.

Every dollar should have a job. Splitting your budget across the wrong areas can slow your growth.

A common Series B allocation looks like this:

This isn’t a fixed rule. If product is your main edge, you may need to invest more there. The point is to spend where it helps revenue grow—not where it just looks busy.

Tip: Review your spend monthly. Don’t wait until you’ve burned half your raise to make changes.

Post-funding, you need to track performance closely. Investors will ask for updates, and your team will need to see progress. Good data keeps everyone focused.

Here are key metrics Series B companies track:

Keep these in a simple dashboard that updates in real time or weekly. Don’t overcomplicate it.

Now that you’ve raised money, communication becomes part of your job. Investors don’t expect perfection—they expect clarity.

Send a regular update (monthly or every 6 weeks) with:

This builds trust. It also makes it easier to get follow-on funding later. Founders who go silent often struggle when it’s time to raise again.

Yes, it sounds early—but smart founders plan ahead. Use Series B to build the numbers and systems that Series C investors will expect.

Get ready by:

Series B is a stepping stone. If you use it right, Series C will come faster—and on better terms.

Spending Series B money well doesn’t mean spending fast. It means building smart, tracking growth, and setting up for your next move. Stay focused, stay lean, and stick to what’s working.

Raising Series B funding is a big step. It means your startup has passed the early tests and is ready to grow faster. But before you go out and pitch, take a moment to check if you’re really ready.

Ask yourself:

If the answer is yes, then you’re likely in a good position to raise your Series B round.

If the answer is no, that’s okay too. Spend a bit more time improving your numbers and building out your team. Raising too early can hurt your chances—and your valuation.

Take your time. Plan ahead. And when you're ready, raise with confidence.

Series B financing is the second round of funding for a startup. It usually happens after a company has proven its product and gained early traction. This round helps businesses grow by expanding their team, entering new markets, and scaling operations.

The average Series B funding round ranges between $30 million and $60 million. In the U.S., it was around $45 million in 2021. The exact amount depends on the company’s size, growth rate, and market opportunity.

Yes, Series B funding is a positive milestone. It shows that a startup has traction and is ready to grow faster. This round brings more capital, experienced investors, and a chance to scale operations and increase market share.

To invest in Series B funding, you typically need to be an accredited investor or part of a venture capital firm. Some platforms offer access through equity crowdfunding, but these are less common. Most Series B deals are private and require strong connections.

After Series B, startups may raise Series C funding. This round is focused on expanding to new markets, preparing for acquisition, or moving toward an IPO. Each round brings more capital and higher expectations.

Series A funding helps a startup build its product and find product-market fit. Series B funding is for growth. By Series B, the business has traction and uses the capital to scale sales, marketing, and operations.

Series B funding usually lasts 12 to 24 months. It gives the company time to hit growth goals before raising the next round, often Series C. The timeline depends on burn rate, revenue growth, and business model.

Investors look for clear metrics in Series B funding, including: Monthly or annual recurring revenue (MRR or ARR), Customer growth and retention, CAC and LTV, Churn rate, Burn rate and payback period. These numbers show if the business is ready to scale.