Securing Series A funding is a major achievement — it confirms investor confidence in a company’s innovation and future potential. But once an organization has the capital in hand, the challenge shifts. For CFOs, the focus must turn to strategically managing newly acquired funding to sustain the organization’s runway, deliver scientific progress, and prepare for the next growth phase.
Unlike traditional startups, life sciences companies face a longer path to commercialization, greater regulatory complexity, and significant capital demands for clinical development. These dynamics require a disciplined, forward-looking financial strategy.
Here are five steps that can help post-Series A CFOs drive meaningful outcomes:
Implement a Stage-Gated Funding Approach
The “all-in” funding model used by software startups can be challenging for life sciences companies. Instead, they should consider implementing a stage-gated funding model that aligns capital deployment with scientific milestones. Key implementation steps include:
- Identifying critical scientific inflection points: Life sciences companies can benefit from working with scientific teams to map key experimental milestones that will significantly de-risk technology.
- Creating detailed budgets for each stage: Organizations can consider breaking down their overall budgets into specific allocations, including contingency buffers.
- Establishing clear success criteria: It’s important to define specific, measurable outcomes to determine whether to proceed to the next funding stage.
- Instituting regular review cycles: Teams should set up monthly or quarterly meetings to assess progress and adjust funding priorities as needed.
This approach helps maintain financial discipline and supports transparency with investors while giving scientific teams the resources they need to succeed. It also creates natural pivot-points to assess whether to redirect or persevere based on experimental results.
Demonstrate Corporate Maturity
Many life sciences companies reach Series A with only basic financial systems and limited professional staff. While this may have sufficed during the seed stage, it’s not adequate for managing rapid growth, increased hiring, and strategic financial planning.
Once a startup has secured Series A funding, it can explore hiring a controller or director of finance to manage the increased day-to-day responsibilities of budgeting, forecasting, and cash flow. This person may also lead the project to implement an enterprise resource planning (ERP) solution.
While it may seem like administrative overhead, moving on from basic accounting software to a scalable ERP solution is critical. An ERP system enables life sciences companies to efficiently track expenses, manage cash, report to investors, and maintain compliance, saving countless hours of manual work while requiring less staff and reducing the risk of human error. In addition, an ERP enables the organization to enact the processes, policies, and reporting requirements that are necessary for when the company goes public. Putting the right systems in place early helps ensure financial processes have a structured approach while providing a history of accurate reporting well ahead of an IPO.
What Financial Systems and Processes Should Life Sciences Companies Consider Implementing?
- Hire an experienced controller or director of finance who can grow into the controller role to manage the day-to-day financial duties.
- Implement an ERP system that scales in functionality as needed, like BDO’s Life Sciences Solution for NetSuite to automate financial workflows, provide reporting, and support an increasing procurement function.
- Institute processes to ensure segregation of duties, multilevel, rule-based approvals for expenditures, and clear delegation of authority policies — all of which can be implemented within an ERP.
- Consider clinical trial accounting software, like Condor, to manage accruals, reconciliation and forecasting when running multiple trials simultaneously.
- Institute a formal budget tracking process with variance analysis within the ERP, clinical trial software, or a separate integrated financial planning and analysis application, like Planful, NetSuite Planning and Budgeting or OneStream.
- Institute regular financial audits, and run month- and quarter-end close, following the processes that will be used once the company has gone public.
Series A not only amplifies scrutiny from investors but also from regulators. CFOs must ensure compliance with generally accepted accounting principles (GAAP) and industry-specific requirements, like good clinical practice (GCP) for clinical trials. The period prior to an IPO is the time to start engaging with legal and regulatory professionals to navigate complex issues, such as intellectual property protection and FDA compliance. Proactively demonstrating organizational maturity enhances investor confidence, smooths regulatory compliance, and helps build a scalable foundation to deal with the rapid change that securing Series A initiates.
Strategically Align Capital Structure
Series A funding doesn't have to be a company’s only source of capital. In the life sciences industry, there are numerous non-dilutive funding opportunities that can extend runway 30%-40% without sacrificing equity.
Non-Dilutive Funding Sources To Explore:
- Government Grants: SBIR/STTR grants can provide significant funding for specific research objectives without diluting equity. The success rates for well-prepared applications can exceed 20%, according to a report from the National Institutes of Health.
- Foundation Funding: Disease-focused foundations often provide research grants for promising technologies in their areas of interest.
- Strategic Collaborations: Joint research with established companies may bring capital, validation, and clinical experience.
- R&D Tax Credits: Many jurisdictions offer tax incentives for qualified research activities that can significantly reduce your tax burden.
- Venture Debt: Venture debt can extend runway without further dilution and complement equity funding, making it something life sciences companies should consider.
Each funding source comes with different requirements and restrictions, so it’s essential for life companies to create a comprehensive funding strategy that leverages these opportunities while ensuring they align with scientific and strategic objectives.
Develop a Strategic Outsourcing Framework
The build-versus-buy decision is particularly critical in life sciences, where specialized resources and equipment often come at a premium. After Series A, many companies rush to hire staff and build internal capabilities only to find that they have overextended financially.
Instead, CFOs can evaluate each function through a cost-benefit lens — considering staffing, research, development, and infrastructure. Outsourcing may be the right option to preserve runway, especially for roles or functions that don’t directly impact intellectual property. In some cases, the complexity of a company’s therapy manufacturing approach or regulatory path may justify internal ownership.
Rapid hiring can stem from the pace of change that follows funding. A combination of phased hiring and outsourcing allows for greater flexibility while supporting operational progress. Functions like finance and IT are commonly outsourced to third-party providers, who offer scalable staffing and managed services that can transition in-house when timing is appropriate. This approach helps reduce hiring risks while supporting core operations.
Outsourcing Decision Matrix
Function | Typical Benefits |
| Staffing | Staffing hours can scale over time until full-time headcount is required. Frequently used for finance and IT. |
| Preclinical studies | Access to specialized tools and scientific capabilities not readily available in-house. |
| Clinical trials | Regulatory guidance, global site access, managing complexity of patient recruitment, expenses and reporting. |
| Manufacturing | Capital efficiency and volume flexibility. May be less suited for novel or IP-heavy processes. |
| Regulatory | Access to detailed knowledge, cost-effective for routine or early-stage guidance. |
As CFO, building a thoughtful outsourcing framework can support disciplined growth. By balancing internal development with external support, organizations can maintain flexibility, preserve capital, and keep critical processes — such as IP and regulatory pathways — under the right level of control.
Prepare Early for the Next Funding Round
While Series A and non-dilutive capital provide a meaningful runway, most life sciences companies will require additional funding to reach key commercialization milestones. In many cases, the path to Series B begins the moment Series A is finalized.
It’s critical for CFOs to anticipate the expectations of future investors and build the operational foundation to support them. That means tracking the right metrics, documenting scientific and regulatory progress, and demonstrating disciplined capital management — long before formal fundraising begins.
Series B Readiness Checklist
- Scientific Milestones: Document all technical achievements with rigorous data.
- Financial Discipline: Demonstrate careful capital management and accurate forecasting.
- Team Expansion: Place strategic hires in key positions to show organizational maturity.
- Intellectual Property: Display a strengthened patent portfolio and freedom-to-operate analysis.
- Regulatory Strategy: Identify a clear path through regulatory requirements.
- Commercial Potential: Gather market research supporting commercial viability and pricing.
- Strategic Relationships: Build partnerships or collaborations validating the company’s approach.
Effective communication with investors, board members, and internal teams is a cornerstone of successful Series A management. CFOs should provide regular, transparent updates on financial performance, milestone progress, and strategic decisions through the use of data-driven dashboards to present key metrics, such as burn rate, cash runway, and R&D expenditure in a clear, concise manner.
Additionally, CFOs should consider engaging investors early in discussions about future funding needs. Building strong relationships with Series A investors can pave the way for follow-on investments or introductions to other venture capital firms. Internally, it’s also important to align the leadership team on financial priorities to foster a unified approach to growth. Maintaining an ongoing relationship is critical for creating familiarity, communicating progress, and highlighting successes — all factors that will be invaluable in the next round of formal fundraising.
Conclusion
Successfully navigating the post-Series A phase requires balancing scientific progress with financial discipline. CFOs who embrace structure, strategic planning, and proactive communication are better positioned to navigate this transition. By implementing a stage-gated funding approach, building robust financial infrastructure, strategically enhancing capital structure, developing a strategic outsourcing framework, and preparing early for the next funding round, CFOs can position their companies for success.
About BDO’s Life Sciences Services
BDO provides tailored support to life sciences companies navigating key funding inflection points. Our services include:
- NetSuite ERP implementation and support
- Outsourced accounting and IT
- R&D tax credit assessment
- IPO readiness
- CMC Advisory including:
- Quality control and regulatory compliance
- Manufacturing and operations strategy
- Process development and implementation
- Product review and analysis
- Cost of goods modeling
- Manufacturing buy-versus-build analyses
Our cross-functional teams understand the unique demands of life sciences — including GMP manufacturing, clinical trial accounting, preparing for an IPO, AI strategy, and system implementation. With vast industry experience and a hands-on approach, BDO empowers life sciences innovators to focus on what matters most: delivering breakthrough science and improving patient outcomes.
Let’s talk about how we can support your journey from Series A to commercialization.