Not all businesses choose to move on to the Series D stage of fundraising, with many establishing themselves by this point in a way where they’re comfortable in generating their own revenue streams for further expansion. However, there are a few very valid reasons as to why Series D investment may be required.
Firstly, the move could be down to you finding a new means of expansion before angling for an IPO. This extra level of expansion could prove a vital stepping stone before you take the leap of faith into going public.
It’s also possible that your company simply wanted to stay private for a little longer before making the switch towards an IPO.
Another more concerning reason could be down to your business failing to meet its expectations from Series C. Known as a ‘down round’, this scenario would require Series D to act as a safety net in helping to ensure the company’s future isn’t negatively affected by poor returns on investment.
While early rounds tend to run up consistent figures as far as investment is concerned, it’s trickier to pinpoint the level of funding acquired in Series D, because of the various circumstances involved. When entering Series D of funding, it’s important for founders and decision-makers to take a long look at business performance and the plans in place, and cost up the required figures accordingly.