Bottom-line is that you have to be at a point where the evidence suggests you are ready to spend this capital to create a period of hyper growth connected to a clear path forward to creating a billion dollar business. What that looks like to investors depends on so many different circumstances, namely:
How much have you raised previously and when and from whom?
What were the metrics that you expected to hit with that raise and what's reality since then if the path stayed unchanged?
How many months of "good data" (the data that tells the story that validates the pitch) have you collected and how statistically meaningful are the data signals you're using to sell.
6 months of solid data is really reliable, but three months of good data can create a lot of excitement.
And of course, it's important to ensure that what the team defines as traction aligns with investors' assessment of traction, where there can often be significant misalginment. It's good to be asking this question now directly of investors you think are likely good A investor for you. Adam Nash (CEO of Wealthfront) wrote a great blog post about finding the right investors here: http://13hourstothink.com/2011/11/03/vc-tips-sell-burgers-to-meat-eaters/ …
You also want to make sure that you have filled any gaps in your team required (as defined not by you but by outsider assessment) to really scale your business.
Happy to talk to you in detail about where you're at and try to give you some more specific advice.
Hope this helps set a general sense.
I get this question quite often. I met a guy yesterday who has had 18000 free download of his mobile app, knocking the doors of angel investor without success
I feel what is needed in the first 6 month is definitely traction but more importantly stickiness.
The metrics that you should be tracking is how many of your early adopters are really using your app, coming back to you every month , giving you feedback (positive or negative feedback) every month.
Once your series A investor see stickiness & feedback from your early adopter you will see flocking towards your venture
There's no magic number that automatically get's you "approval" for a Series A. Some questions to ask:
- How do I define my market and how big is it?
- Who are my customers and if a competitor did the exact same thing why would a customer choose me?
- How fast am I converting prospective customers to paying ones? If someone where to give me the capital I need tomorrow how many customers would I add?
These are the types of questions a Series A funder is looking for you to ansewer. They want to know "x" amount of capital will return roughly "y" for them as you've determined most of the major aspects of your business model (what you do, who your customer is/could be and how you make money). Feel free to call me if you'd like to walk through more of these questions for your company.