As an engineer, I love the scientific method. In case you’ve forgotten it, 

  1. Define the question
  2. Gather information and resources (observe)
  3. Form hypothesis
  4. Perform experiment and collect data
  5. Analyze data
  6. Interpret data and draw conclusions that serve as a starting point for new hypothesis
  7. Publish results
  8. Retest (frequently done by other scientists)

via Wikipedia

One way of thinking of fundraising steps is in light of the scientific method: 

Pre-seed: (Steps 1-2)

Seed: (Step 3) I have an idea and need some money to further develop my hypotheses

Series A: (Step 4, 5) I have a basic product and perhaps some initial data, but, more importantly, I have concrete hypotheses that I think are correct and I’m raising money to prove them.

Series B: (Step 6, 7) I have proved some of the initial hypotheses and now I’m looking for money to scale it and see if the demand will grow with an increased sales and marketing presence.

Series C: (Step 8) All of my hypotheses are proven. I’m looking for money to continuing to invest in the business and make sure it’s really big. 

An example:

Steven wrote a blog post about Cafe Press that aligns neatly with this idea of fund raising. Highly recommended reading. 

The reality

This template is one ideal. There are many stories of businesses that pivot, successfully and unsuccessfully, taking a more circuitous route. There are stories of businesses that take many more financing rounds as they educate the market or await for the hypothesized market conditions to develop at slower than estimated pace. 

But as a very basic outline, I find this works for describing at a high level what mentality I have when entering a meeting about a particular financing round.