What it is
A Series A is usually a company's first major, institutional-style funding round after early seed or pre-seed financing. Companies at this stage are often trying to show that an early product or service can work repeatedly, and to build a foundation for growth.
A Series B generally comes later, once a company has some track record and is looking to expand what already works. Funds raised at this stage are often directed toward scaling teams, reaching new customers, or strengthening operations.
The names come from the class of preferred stock that is often issued in each round. The labels are conventions, not legal rules, so what a Series A or Series B looks like can vary a great deal from one company or industry to another.
How it’s traditionally been approached
Traditionally, founders have approached these rounds by preparing materials, such as a business overview, financial information and a description of their plans, and speaking with potential investors over a period of weeks or months. Many rely on their networks, advisors and lawyers to guide the process.
Investors often look at different things at each stage. In a Series A, the focus may be on the team, the product and early signs of demand. In a Series B, there may be more attention on how the business has performed and how it might expand further.
Offerings of securities in the United States are typically made under exemptions from registration. Rule 506(b) generally does not allow general solicitation. Rule 506(c) allows general solicitation, but all purchasers must be accredited investors and the company must take reasonable steps to verify that status. Securities counsel can explain which approach may apply.
How the right investor may help
The right soft circle investor may help a founder or reader think through how the stages differ, what questions are worth asking, and how a round might be structured. Soft circling means gathering non-binding indications of interest, which are not commitments, and can be a way to gauge interest before a formal process begins.
When you connect with an independent investor through SoftCircle, a conversation is generally exploratory. Many people share a high-level picture of their situation and goals, and the investor may share how they think about stage, focus and involvement.
Helpful questions to ask include: What stages are you generally interested in learning about? What do you typically want to understand about a company? How do you approach communication over time? What role do securities counsel and other professionals play? SoftCircle is a directory, not a broker-dealer, funding portal or investment adviser, and does not recommend or endorse any investment.
The bigger picture
Funding decisions can carry real emotional weight. Founders may feel pressure about timing and dilution, while others weighing a role in these rounds may feel uncertainty about risk. Taking time to clarify goals, comfort level and what you can afford to be patient with can support better peace of mind.
Looking after your whole self matters too, including sleep, support from people you trust and realistic expectations. If it's relevant to your wider wellbeing, Providers.plus is one place to explore additional resources. No single approach is right for everyone.
Keep in mind
- This page is educational only and is not investment, legal or tax advice.
- Nothing here is an offer to sell, or a solicitation of an offer to buy, any security.
- Soft circle indications of interest are non-binding and are not commitments.
- Consult securities counsel and other qualified professionals about Rule 506(b), Rule 506(c) and your own situation.
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Frequently asked questions
What is the main difference between Series A and Series B?
The main difference is the stage of the company. Series A usually comes first and focuses on establishing a foundation for growth, while Series B generally follows and focuses on expanding what is already working. The specifics vary widely by company and industry.
Which comes first, Series A or Series B?
Series A comes first. It typically follows seed or pre-seed financing, and Series B comes afterward if a company raises another priced round. Not every company raises every round.
Why are the rounds called Series A and Series B?
They are named after the classes of preferred stock often issued in each round. The letters are a naming convention rather than a legal requirement, so companies may structure rounds differently.
What is a soft circle in fundraising?
A soft circle is a non-binding indication of interest from a potential investor. It is not a commitment to invest and does not create an obligation for either side. It is sometimes used to gauge interest before a formal process.
What is the difference between Rule 506(b) and Rule 506(c)?
Rule 506(b) does not permit general solicitation, while Rule 506(c) does. Under Rule 506(c), all purchasers must be accredited investors and the company must take reasonable steps to verify that status. Securities counsel can explain which may apply to a given situation.
Does SoftCircle recommend investments or Series A vs Series B rounds?
No. SoftCircle is an independent educational directory and is not a broker-dealer, funding portal or investment adviser. It does not recommend or endorse any investment, and nothing on the site is an offer or solicitation.
Educational resource. SoftCircle shares general information and connects people with independent investors. It is not professional advice. Talk with a qualified professional about your own situation.