Financial Glossary
Series B
Series B is a venture capital funding round that typically follows a demonstrated proof of business model viability established in earlier seed and Series A rounds. At this stage, companies have meaningful revenue traction, a defined customer acquisition process, and are raising capital primarily to accelerate growth: hiring across sales, marketing, and engineering, entering new geographic or vertical markets, and building out infrastructure to support scale. Series B investors -- often growth-stage VC funds -- evaluate metrics including ARR or GMV trajectory, gross margin, CAC payback period, NDR, and the competitive landscape. Valuations are set relative to revenue multiples prevailing in the sector at the time of the round.
Problem & Application
A SaaS company targeting campground and RV park operators has grown from $500K to $3M ARR over 18 months post-Series A, with 110% NDR, a 14-month CAC payback, and 72% gross margins. The founding team has identified that three enterprise deals in the pipeline -- each representing $150K ARR -- require dedicated implementation staff they cannot hire without capital. They raise a Series B of $12M at a $40M pre-money valuation (roughly 13x forward ARR). The CFO diligence package includes a three-year bottoms-up financial model, cohort-level churn data, unit economics by customer segment, and a uses-of-proceeds schedule showing how the $12M maps to headcount hires, sales and marketing spend, and product investment. Parikh Financial or an outsourced CFO would typically own the data room preparation, the investor-ready financial model, and management of the audit (most institutional Series B investors require reviewed or audited financials).
In Short
Series B funding accelerates a company’s growth but requires strong financial metrics and operational performance to attract investors.