Series A funding usually refers to a company’s first significant round of venture capital financing. This level of funding typically ranges from $2M–$10M, which is used for building product and establishing product-market fit.
This Brooklyn-born start-up positions itself as a companion service for members already insured with traditional health plans. Sherpaa coordinates and streamlines access to health care for its members, who sign up through their participating employer. Sherpaa members may consult a physician via web or app, and Sherpaa physicians resolve about half of all cases remotely. All doctor-patient communications are documented, free of the time constraints of an office visit, and physicians are able to search the literature as needed, resulting in a malpractice rate one-third of that of a traditional office-based physician.
Because Sherpaa provides easy access to physicians, its members can use the company’s physicians to receive diagnosis and treatment for common complaints and ailments. Consultations with Sherpaa physicians are not billed to patients’ traditional insurance plans, ultimately resulting in very low (≤2%) premium increases for clients.
The Valley of Death
90 percent of new start-ups will never bridge the gap from their seed funding to a Series A. Here are a few reasons why
by Rishi Madhok, MD
Seed investors can be from friends and family or regional or state grants. Those initial investors often care more about the person behind the concept – or the potential for job creation – than they do the actual business value. A VC on the other hand is very clear in what they expect from investing: significant returns within a 5-10 year period on a business that can scale quickly.
VCs invest in both a business and the people behind it. Small start-ups do not have the ability to compensate for bad hires or poor management dynamics. As a result, some of those intense, driven personalities drawn to start-up culture can drive away talent and eventually investors as well. One toxic partner or bad seed money can be fatal to getting VC funding and closing your Series A.
Fail Fast, Fail Cheap
The old mindset of getting a product 95% “right” before taking it to market is gone. This style of development leads to a product that is outdated before it even reaches its users; making changes expensive or impossible. Don’t underestimate the power of getting the idea 50% right and improving on the 50% wrong. Get users, learn from mistakes while its easier to change, show growth, and bridge the valley of death.