What is Series B Funding?
Series B funding is a growth-stage round designed to help companies expand once they’ve achieved clear product–market fit. Investors want evidence that the company has a proven demand engine, stable revenue foundations, and a roadmap that turns additional capital into accelerated scale, not more experimentation.
Most founders use Series B capital to build larger sales teams, expand into new markets, deepen product capabilities, and introduce more structured operational systems.
What Series B Investors Look For
In Series B, growth-stage investors test whether your model can scale without breaking. The focus shifts to repeatability, efficiency, and operational maturity. Below are some key signals investors expect to see:
- Predictable customer acquisition and conversion
- Strong revenue quality (retention, expansion, low churn)
- Unit economics that improve with volume
- Mature leadership, reporting, and workflows
- Early infrastructure for scale (finance, product, ops, people)
If Series B still feels out of reach, start with our guide: Typical Series A Funding Benchmarks Every Founder Needs to Know.
How Much Is Series B Funding?
While amounts vary across industries and regions, Series B rounds generally fall within a predictable range. Capital-intensive sectors tend to raise larger rounds above $50M, while highly efficient businesses or those with strong existing revenue may raise smaller rounds in the $10M to $20M range.
The size of the round typically reflects two core drivers: the scale of the opportunity ahead and the operational maturity already in place to support accelerated growth. Investors want confidence that the company can deploy capital effectively without overwhelming its systems or leadership capacity.
For founders, the goal is to raise enough to meaningfully expand the business, not to resolve foundational issues that should have been addressed before pursuing a growth-stage round.
How Long Does Series B Funding Last?
Most Series B companies plan for 18 to 24 months of runway, though timelines vary based on growth expectations and burn discipline.
Consider these factors that may influence runway:
- Hiring pace and team expansion
- Go-to-market investments
- Product roadmap and R&D needs
- Market-entry costs
- Cash efficiency and operational discipline
Investors expect that by the end of the Series B cycle, the company will demonstrate stronger predictability, clearer expansion pathways, and improved unit economics, setting the stage for Series C or selective profitability.
The Metrics That Matter Most at Series B
While every business model differs, several metrics consistently shape Series B outcomes.
Revenue & Growth
- ARR Progress
ARR measures recurring revenue momentum, and investors track it to confirm predictable scale; Series B companies often show $10M+ ARR with steady quarter-over-quarter growth.
- Year-over-Year Growth Rate
YoY growth captures how rapidly the business is expanding, and investors use it to assess momentum durability; strong Series B companies typically deliver 50%–150% YoY growth.
- Pipeline Reliability and Forecast Accuracy
This reflects how consistently opportunities convert, and investors rely on it to judge the credibility of future revenue; Series B companies are expected to show tightening forecasts with predictable conversion patterns.
Customer Quality
- Net Revenue Retention (NRR)
NRR measures expansion from existing customers, and investors view it as proof of product value; Series B benchmarks often range from 110% to 130%+.
- Gross Churn
Gross churn shows the rate at which customers leave, and investors measure it to understand whether growth is sustainable; Series B companies typically maintain low churn, often <5% annually for enterprise.
- CAC and CAC Payback
CAC payback shows how quickly acquisition investments recover, and investors use it to evaluate go-to-market efficiency; Series B companies commonly target 12–24 month payback periods.
- LTV/CAC
LTV/CAC compares customer value to acquisition cost, and investors evaluate it to confirm long-term profitability; Series B teams often show ratios of 3:1 or higher.
Efficiency
- Gross Margin Stability and Expansion
Gross margin reflects core profitability, and investors watch it to ensure costs improve with scale; Series B SaaS companies typically operate at 70%–80%+ margins.
- Sales Efficiency (Magic Number)
The Magic Number measures how effectively sales spend converts to revenue, and investors rely on it to judge whether more sales investment will accelerate growth; Series B companies often fall between 0.7 and 1.5.
- Contribution Margin by Product
Contribution margin shows profitability at the product level, and investors track it to understand which segments drive value; Series B companies should show positive margins or a clear path toward them.
Crafting the Series B Narrative
A strong Series B story weaves performance, direction, and operational readiness into a clear case for acceleration. Investors want to see that additional capital won’t just fuel growth, but will amplify the systems and momentum already in motion.
To make that case effectively, your narrative should highlight:
- Proven demand and scalable acquisition channels
- A market large enough to support meaningful scale
- Strengthening unit economics and growing efficiency
- Leadership depth and internal systems that can handle expansion
- A clear use-of-funds plan tied to measurable outcomes
Common Gaps That Slow Down a Series B Raise
Even strong companies run into friction when certain signals create uncertainty for investors.
- Growth is present but inconsistent.
Irregular performance makes it harder for investors to model future scale, raising doubts about repeatability.
- CAC rises faster than revenue.
When acquisition costs outpace growth, it suggests your go-to-market motion won’t scale efficiently with more capital.
- Churn undermines expansion.
High churn erodes net retention, signaling weak product value and forcing investors to question long-term durability.
- Forecasts lack accuracy.
Inaccurate projections indicate immature systems or poor internal visibility—both red flags at a growth stage.
- Processes depend too heavily on a few people.
Operational concentration exposes execution risk and suggests the company is not yet structurally ready for scale.
- Financials aren’t investor-ready or clean.
Messy or incomplete financials slow diligence, reduce trust, and suggest internal operations may break under growth pressure.
These issues aren’t fatal, but they weaken investor conviction. Addressing them early shortens the fundraising cycle, improves negotiation leverage, and signals organizational readiness for growth-scale capital.
What Changes After Series B
As the company progresses beyond Series B, investors begin looking for signals of repeatability at scale: more predictable revenue, more stable margins, and clearer pathways to meaningful market share.
Moving toward Series C, expectations shift again: the narrative must show not just traction and structure, but dominance, market expansion, and the ability to deploy capital at a much larger scale with predictable outcomes.
Accelerate Your Series B Raise with OakTech
Series B requires sharper metrics, cleaner financials, and a clearer growth story, OakTech Systems helps you deliver all three with AI-powered capital raising tools built for speed and precision.
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