What Founders Wish They Knew Before Raising a Series A

By Gary Fowler

Introduction

Raising a Series A can feel like finally getting to the big leagues. It’s a major milestone that validates your idea, your team, and your execution so far. But talk to any founder who’s been through it, and they’ll tell you the same thing: it’s not just more money — it’s a whole new game. The stakes are higher, the expectations sharper, and the margin for error much thinner. So if you’re preparing for your Series A, here’s what seasoned founders wish they’d known before taking the plunge.

What Makes Series A Different from Seed

At the seed stage, investors bet on your vision, your team, and your potential. At Series A, they’re betting on your results. They expect proof — not just promise.

Here’s What Changes:

• Vision to Validation: Series A investors want evidence that your product works, customers are paying, and the market is responding.

• More Structure: Your startup should look more like a company — with processes, financial systems, and a hiring plan.

• Institutional Rigor: Seed rounds may have been fast and informal. Series A involves committee decisions, partner meetings, and heavy due diligence.

  
  

You’ll need to back up every claim with data. This is where storytelling meets spreadsheets.

Key Metrics Investors Expect at Series A

While benchmarks vary by industry, there are some standard metrics Series A investors expect to see:

• Monthly Recurring Revenue (MRR): Typically $100K+ for SaaS companies.

• Annual Recurring Revenue (ARR): $1.2M–$3M+ is common.

• Growth Rate: 15–30%+ MoM is ideal.

• Churn: Should be low, especially for B2B SaaS (less than 5% monthly).

• Customer Acquisition Cost (CAC): Balanced against Customer Lifetime Value (LTV).

• Burn Multiple: Ideally <2x. (This means you’re burning less than $2 for every $1 of new revenue.)

  
  

The Benchmarks by Industry

Benchmarks vary by industry, but there are general expectations at the Series A stage. For SaaS startups, investors typically look for $1.5M to $3M in ARR, with a monthly growth rate of 15–20% and a burn multiple between 1.5x and 2.0x. In D2C e-commerce, $2M+ in revenue and 20–30% monthly growth are common benchmarks, along with a higher burn multiple of 2.0x to 3.0x. Marketplaces are often expected to generate at least $1M in GMV per month, with a strong emphasis on user growth and a burn multiple ranging from 1.5x to 2.5x. These aren’t hard rules, but if you fall significantly below them, you’ll need a compelling narrative to offset the gap.

How to Prepare for Due Diligence

This is the part no one tells you about — until you’re buried under document requests. Series A due diligence is like preparing for a mini-IPO. It can take weeks, and if your house isn’t in order, it can kill your deal.

Here’s What You’ll Need:

• Clean Cap Table: No mystery SAFE notes or unknown equity promises.

• Customer Contracts: Show signed deals, MRR details, and retention metrics.

• Financial Statements: P&L, cash flow, and balance sheets — preferably reviewed by a CPA.

• Legal Docs: Incorporation, IP assignments, employee agreements.

• Data Room: A secure, organized virtual space (like Dropbox, DocSend, or Google Drive) with all of the above.

  
  

Pro tip: Start organizing your data room before the first VC call. It’ll show that you’re serious, organized, and ready to move.

The Pitch Deck Reboot: Series A Edition

Your Series A deck should be an upgrade from your seed deck — not just visually, but structurally. You’re no longer selling a dream — you’re selling momentum.

What VCs Want to See Now:

1. Traction and Metrics: Detailed MRR, user growth, CAC, LTV, churn, etc.

2. Go-To-Market Strategy: Not just “we’ll figure it out.” Show what’s working.

3. Team Expansion Plans: Who you’re hiring next and why.

4. Market Positioning: How you stack up against the competition.

5. Financial Forecasts: 12–24 month runway, with clear use of funds.

   
   

They’re looking for scalability, sustainability, and signals that your company is ready for prime time.

Storytelling with Data

At the Series A level, storytelling alone isn’t enough — you need to tell a compelling story backed by hard numbers. The best founders don’t just share metrics; they weave them into a cohesive narrative that explains why their startup is winning and will continue to win.

How to Blend Story and Stats:

• Start With the “Why”: Begin with the problem you’re solving, and why now is the perfect time to solve it.

• Introduce Real Results: Use your metrics to show progress — growth in users, revenues, retention, or product usage.

• Highlight Inflection Points: What key moments proved your model works? A spike in usage? A huge customer win?

• Paint the Future: Use your data to project where you’re headed. Make it believable, but exciting.

  
  

Investors don’t just invest in your numbers — they invest in your ability to communicate those numbers clearly and confidently.

Hiring a Fundraising Team

At seed stage, it’s often just the founder and maybe a co-founder doing all the pitching. But at Series A, having a team in place — even if it’s lean — can make a huge difference.

Key Roles to Support Fundraising:

• Head of Finance or Fractional CFO: Someone who can speak to metrics, forecasts, and financial controls.

• Legal Counsel: To ensure all your docs are clean and term sheets are reviewed quickly.

• Executive Assistant or Project Manager: Helpful in coordinating meetings, tracking due diligence docs, and managing timelines.

• Advisor or Fundraising Consultant: If you’re new to raising at this level, someone with Series A experience can open doors and prep you for VC meetings.

  
  

Having the right team shows that you’re mature enough to scale and organized enough to handle a significant investment.

The Role of the CFO or Head of Finance

This is one of the most overlooked but critical hires before or during a Series A. You may not need a full-time CFO yet, but you do need someone who owns your financials.

Why It Matters:

• Accuracy: Investors will dig deep into your numbers. Any mistakes or inconsistencies can hurt credibility.

• Forecasting: A good finance lead can model multiple funding scenarios and help you plan your runway post-funding.

• Reporting: After you close your Series A, investors will expect regular updates — clean dashboards, KPI tracking, and real-time financial health.

  
  

Even a part-time or outsourced CFO can be a game-changer during this phase.

Common Mistakes Founders Regret

Founders often look back on their Series A and wish they had done things differently. Here are the most common regrets:

1. Scaling Too Soon

It’s tempting to ramp up hiring, marketing, and sales the moment you close your round. But if your product or market isn’t ready, you’ll burn fast and crash hard. Validate before you scale.

2. Misaligned Cap Table

Too many SAFE notes, early investors with huge equity stakes, or messy founder splits can scare off Series A investors. Clean up your cap table early, and bring in experienced legal help if needed.

3. Focusing Only on Traction

Traction is great — but it’s not enough. Investors want to see how that traction translates into a sustainable, scalable business model. Don’t just show numbers — show your path to growth and profitability.

4. Not Vetting Investors

Founders often chase the first term sheet without thinking long-term. But your Series A investors will be on your board. Make sure they align with your mission, values, and vision.

What Investors Want to Hear in the Room

When you’re finally in the room with Series A investors, remember: you’re not just pitching a product — you’re pitching your ability to lead a fast-growing business.

They Want:

• Clarity: Do you understand your business model, your metrics, and your market better than anyone?

• Conviction: Are you confident in your direction? Can you defend your assumptions?

• Coachability: Can you take feedback without being defensive?

• Control: Are you in control of the numbers, your team, and your timeline?

  
  

Be transparent about what’s working and what’s not. Authenticity builds trust — and trust closes rounds.

How Long It Really Takes to Close a Series A

Spoiler: it’s longer than you think. Most Series A rounds take 3 to 6 months from start to finish. And that’s if everything goes well.

The Timeline Usually Looks Like:

1. Warm Up (1–2 months): Building relationships, sending decks, initial intros.

2. First Meetings (2–4 weeks): Intro calls, pitch meetings, investor Q&A.

3. Deep Dives (1–2 months): Due diligence, partner meetings, financial review.

4. Term Sheet Negotiation (2–4 weeks): Hammering out deal terms, cap table, board structure.

5. Closing (3–6 weeks): Legal docs, wire transfers, final signatures.

   
   

Start early, manage your runway conservatively, and plan for the process to take twice as long as you expect.

Preparing for Post-Funding Life

Getting the check is just the beginning. Once the Series A money lands in your account, the pressure begins. Investors will want to see results — fast.

New Responsibilities Include:

• Board Meetings: Regular check-ins with formal agendas and KPIs.

• Financial Reporting: Monthly or quarterly updates with actuals vs. forecast.

• Team Building: You’ll likely need to scale your team significantly, which means recruiting, onboarding, and managing at a whole new level.

• Runway Management: Keeping burn under control while driving growth is now your full-time job.

  
  

Welcome to the next phase — you’re no longer a scrappy startup. You’re now the CEO of a high-growth company.

Conclusion

Raising a Series A is one of the most pivotal moments in a founder’s journey. It’s the moment you stop being a scrappy startup and start being a serious business. The bar is higher, the process more rigorous, and the expectations sharper.

But here’s the good news: with preparation, the right story, and a solid grip on your metrics, you can walk into those investor meetings with confidence. Know your numbers. Know your narrative. Know your audience.

And above all, remember: Series A isn’t the end goal. It’s just the beginning of the next chapter.

FAQs

How much should I raise in Series A?

It depends on your runway needs and growth plans, but most Series A rounds range from $5M to $15M. Don’t raise more than you can deploy efficiently over 18–24 months.

What’s a good burn multiple?

A burn multiple under 2x is considered healthy at Series A. That means for every $1 of net new revenue, you’re burning less than $2. Higher than that? Investors will dig deeper into efficiency.

Do I need a CFO before Series A?

Not necessarily full-time, but you should have someone (fractional CFO, Head of Finance) who owns your numbers and can support due diligence and modeling.

How do I manage multiple term sheets?

Transparency and speed matter. Notify all parties once you receive a lead term sheet and set clear timelines. Use this leverage to negotiate the best deal without burning bridges.

What happens after Series A?

You’ll report to a board, scale your team, hire more executives, and move from proving your product to scaling your company. The pressure intensifies, but so does the potential.