You've got the idea. It's the next big thing. You're sure of it. You even dipped into your savings to seed the business, build a prototype, and test it with your earliest adopters.

This product will drive a billion-dollar IPO ... except that you're out of money and you need technical help refining the product and deploying it to the millions of users who will surely love it.

To take the next step in this entrepreneurial dream, you're going to need to raise more money.

What is a series A round?
When startups raise money from venture-capital firms, each round of fresh capital is notated with a letter, starting with A. Therefore, a company's series A financing is the first round of capital it raises from a venture-capital firm.

Often, the series A round is preceded by what's called seed money. Seed money could, in theory, come from a venture-capital firm, but far more often it comes from the founder's savings or from friends and family.

What do investors look for before investing in a series A round of financing?
At this point in a business' life, there isn't a whole lot to show off. There is probably a product or service, but it's most likely still in the development phase. Or the product itself may still just be a concept.

Venture-capital firms know this. They don't expect the business to be fully developed at this point. However, they do expect the entrepreneur to have done some homework and to have a plan to get from this point to a fully scaled business.

To raise a series A round of financing, the venture-capital firm will need to understand the product and the problem it solves. It'll expect a well-thought-out business plan, because ultimately this is a business transaction and the company needs to be able to one day turn a profit. It'll also want to understand how large the addressable market for the product is, to better understand exactly how large the upside could be.

The venture capitalists will have lots of questions about the product itself and its development. Is there any traction? How many users? What kind of engagement? The entrepreneur should be prepared with plenty of data to support the product's viability.

Perhaps most important of all, it'll expect the entrepreneur to have a clear plan of attack to take the product from the series A round to becoming the next big thing. All parties involved want the business to be a success, so it's only natural that there be a plan to get it done.

Now it's time to get to work
Reid Hoffman, founder of LinkedIn, shed some light on just how difficult it is to raise venture capital:

Investors see a lot of pitches. In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches; decides to look more closely at 600 to 800 of them; and ends up doing between zero and two deals. The goal of an entrepreneur is to be one of those deals.

If you expect to be one of the few companies that do raise venture money, you've got to stand out. The business, the entrepreneur, the team, the whole operation must stand out as elite.

The more interest from your customers, the better. That, beyond a shadow of a doubt, will prove the validity of your concept. The business plan must be top-notch, and the management team's execution thus far must be near-perfect. The addressable market needs to be large, and the company needs to have a clear shot at becoming the leader in its niche.

If you think about it, all of these attributes paint a picture of a high-probability investment for the VC firm. Why wouldn't it invest if you could check all these boxes?

For entrepreneurs seeking to raise venture -capital money in a series A round, that is the point to remember. The better the case you make that your product will be a success, the better your chances at raising money.

Jay Jenkins has no position in any stocks mentioned. The Motley Fool recommends LinkedIn. The Motley Fool owns shares of LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.