Series B
Also known as Series B Round, Series B Financing
Series B is the scaling round that funds GTM expansion and team build after a company has proven its initial GTM motion. Carta puts the median Series B pre-money valuation at $118.9M for primary rounds in Q3 2025, with median dilution falling to 12.9% as round sizes grow without proportional valuation increases.
In depth
Series B is the awkward middle stage of venture. The company has cleared the existential risk, the burn is real, and the question shifts from "does this work?" to "how big can this get?" Series B leads are typically growth-stage funds writing $20-40M checks, sometimes with a tranche structure tied to forward milestones.
Carta's 2025 data shows Series B occupying a strange position: median dilution fell sharply, from about 15% to 12.9%, the steepest drop-off at any stage. The mechanic is simple. Round sizes are bigger than they were in 2022, but valuations grew faster, particularly for AI companies. A $30M Series B at $200M pre-money is now common where a $25M B at $100M pre-money was standard three years ago.
The capital structure also gets more complex. Pay-to-play provisions, ratchets, and aggressive participating preferred terms reappear in tougher market conditions. Cooley's Q4 2025 report notes that pay-to-play frequency reached 10.1% in Q2 2025, mostly at Series B and later.
Why it matters
Series B is where venture math starts to mean something for LPs. The company is no longer a binary, and the markup from B to C is the cleanest predictor of fund-level TVPI in growth-oriented portfolios. A Series A check that marks up to a clean Series B at 2-3x cost typically tracks to a 4-6x exit on average, modeling forward off Cambridge Associates benchmarks.
For founders, Series B is also the first stage where secondary sales become feasible. Lead investors often allow 5-10% of the round to clear early shareholder positions, releasing pressure on founders who have been paying themselves below market for 5-7 years.
Worked example
A B2B SaaS company at $11M ARR raises a $30M Series B at $170M pre-money, $200M post-money. The lead does not require a pool top-up because the existing 12% pool is sufficient.
Series B dilution: $30M / $200M = 15.0%
No pool top-up this round.
Founder ownership before: 45% (post-Series A)
Founder ownership after: 45% × (1 - 0.15) = 38.25%
Founders exit Series B with roughly 38% on a fully diluted basis. The Series B lead holds 15%, with the remainder distributed across Series A investors, the pool, and seed-stage holders who have not fully cleared their pro rata.
Frequently asked
What milestones do I need to raise a Series B?
Typical Series B companies show $8-15M ARR, net retention above 115%, a working sales motion, and a credible path to $50-100M ARR. The round funds scaling that motion, not finding it. Investors expect at least two quarters of consistent growth at scale, not a single big quarter.
How big is a Series B in 2025?
Carta data shows median Series B pre-money valuations of $118.9M in Q3 2025, with most rounds raising $25-40M. Bridge Series B rounds (companies extending into a Series B without true scale) clear at higher pre-money valuations of around $142M but typically with worse terms.
How much dilution at Series B?
Median Series B dilution fell from roughly 15% to 12.9% in 2025 per Carta, the largest drop-off across any stage. Round sizes grew while valuations grew faster, so each dollar bought less of the company. Founders own roughly 23% on a fully diluted basis after Series B.
Series A vs Series B: how is it different?
Series A funds the search for repeatable GTM; Series B funds scaling it. Series B leads are usually growth-stage funds, not the early-stage firms that led the A. The round often introduces a second board observer, more aggressive milestone-tied tranches, and the first real conversations about secondary sales for early shareholders.
What if I can't raise a Series B?
The fallback is an extension round, a bridge convertible, or a recap. Carta's 2025 data shows the share of Series A companies graduating to B has thinned, with median time A-to-B extending to roughly 2.5 years. Companies that stall often pivot to capital efficiency and run for cash flow rather than the next priced round.