What’s the best way to raise your series A?

Lee Hower (General Partner of NextView Ventures)
What Milestones Are Needed to Raise a Series A? – AGILEVC

There’s no magic formula for a successful Series A unfortunately. But these five tenets can help internet / software entrepreneurs increase their prospects. (1) Core team ready to scale (2) Demonstrable market size (3) Repeatable, cost effective customer acquisition (4) Metric momentum (5) Plausible monetization

What’s the best way to form your initial team?

Lee Hower (General Partner of NextView Ventures)
Playing Startup – NextView Ventures

I fear a meaningful number of people are “playing startup” today. What I mean is that people are joining startups because working in a startup seems cool or lucrative, not because they want to change the world and they’re fundamentally committed to putting in all the blood, sweat, and tears that entails.

What’s the best way to raise your series A?

Jason Calacanis (Founder & CEO @ Inside.com)
What is the current Series A market like (as of January 2016)? – Quora

In order to close a Series A you need 2-3m in ARR or 1m+ MAU growing at 20% m/o/m. There are too many startups with $100k a month in MRR and too many consumer products with 100-500k MAU and not enough VCs to invest in them.

Patrick Mathieson (Associate @ Toba Capital)
Patrick Mathieson’s answer to What are the metrics necessary for an enterprise SaaS startup to get a meeting with investors for a Series A? – Quora

Month-over-month MRR growth of 10% (15% is better / 20% is great).

Patrick Mathieson (Associate @ Toba Capital)
Patrick Mathieson’s answer to What are the metrics necessary for an enterprise SaaS startup to get a meeting with investors for a Series A? – Quora

A payback period of less than 12 months (9 is better / 6 is great). E.G.: “Our all-in customer acquisition cost averages about $1,000, and the average customer contributes a gross margin of $125 per month, so payback period averages 8 months.”

Ed Sim (Founder and Managing Partner @ Boldstart Ventures)
The 4 Kinds of Series A Rounds in Enterprise — Medium

The 4 kinds of A rounds:
No A round. Sucks. — self explanatory. Vision A round, super hard — raise on the promise and pre-launch, on the vision, huge market with the killer team that can build and scale. sometimes easier to raise on the promise and the expectations of amazing success than after the launch. Metrics A round, easier — killer metrics, repeatable growth and predictable sales model, used to be $80–$100k MRR/$1mm ARR, the bar is raisin… (read more)

Nnamdi Okike (Partner @ 645 Ventures)
Charting A Path From Seed To A Competitive Series A Round | TechCrunch

a top-quartile enterprise-focused VC firm may have a $1 million ARR hurdle for a SaaS deal, or that a top-quartile consumer investor may have a $2 million run-rate revenue hurdle for an e-commerce company. Also for revenue-generating businesses, future growth plans are created that articulate a clear path to becoming a large revenue company with attractive future profit margins.

Shriram Bhashyam (Founder @ EquityZen)
The Metrics Required for Raising a Series A Round

E-commerce. This is a dense market, with diminishing margins, and heavy-weight incumbents (see Amazon). Also, VCs are licking their wounds from companies like Fab and Gilt (wasn’t Gilt supposed to IPO for the last 4 years?). $1 million monthly recurring revenue (MRR) is the key metric here.

Shriram Bhashyam (Founder @ EquityZen)
The Metrics Required for Raising a Series A Round

Consumer Apps. Another crowded field and the shadow of King Digital looms.
50K daily active users.
25% month-over-month (MoM) user growth.

Shriram Bhashyam (Founder @ EquityZen)
The Metrics Required for Raising a Series A Round

SaaS. Jason Lemkin (the SaaStr himself, of Storm Ventures) has noted the following: $50-150K MRR. > 100% YoY growth on MRR or annual run rate (ARR) basis.

Shriram Bhashyam (Founder @ EquityZen)
The Metrics Required for Raising a Series A Round

Marketplace. Marketplaces are tricky (trust us, we know) because of the chicken/egg problem with supply and demand (buyers want to see good supply, and good sellers will list where there are buyers). It is understood that liquid marketplaces also take a while to build. $500K-$1 million in monthly gross market volume (GMV). 20-30% MoM growth in GMV. Liquidity: > 10% demand/supply ratio. Transaction velocity: the time it takes to have a transaction… (read more)

Ari Newman (Network Catalyst @ Techstars)
How to Get From Seed to Series A – Techstars

Responses included some of the market-standard metrics like $100K MRR and double digit monthly growth as common targets.

Ari Newman (Network Catalyst @ Techstars)
How to Get From Seed to Series A – Techstars

“Build relationships, not pitches,” was discussed as well. The panel debated whether this was true for seed rounds vs. Series A. The gist of the debate was that many Series A round investment decisions can happen when the investor is in “advice mode” and the light bulb goes off.

Tomasz Tunguz (Partner at Redpoint Ventures)
How Fast Must a SaaS Startup Grow to Raise a Series A?

To satisfy both the revenue and timing conditions, the SaaSCo founders should aim for a 15%+ monthly growth rate.

Anjula Bath (Partner @ Trinity Ventures)
Fundraising – From Seed To Series A by Techstars | Free Listening on SoundCloud

Don’t ever tell anybody you’re raising money. Because the moment you tell them you’re raising money they think you’re selling them and that always works against you. I didn’t tell anybody I was raising money. I went around saying that I had this amazing idea that was getting all this tgraction and I didn’t know what to do and in 24 hours I got two term-sheets from investors.

Josh Kopelman (Partner at First Round)
What the Seed Funding Boom Means for Raising a Series A | First Round Review

When thinking about timing, remember, a good fundraising process will take between 4 and 8 weeks. Adding in preparation and time to close, you’re talking a few months. Remember this math when you’re thinking about timeline and proof points. Cutting things too close can be dangerous

NextView Ventures (hands-on seed investor, focused on internet-enabled startups)
Winning Strategies Startups Use to Raise Series A [VC Portfolio Data]

The average time between raising seed capital and raising a Series A was 303 days (about 10 months)

Jenny Fielding (Managing Director @ Techstars)
Fundraising – From Seed To Series A by Techstars | Free Listening on SoundCloud

Don’t wait until you need money to start relationships with investors. People think that you start your company, you wait a few months, you raise your round. If you need to raise money in a year or two, you need to start those relationships now.

Lee Hower (General Partner of NextView Ventures)
What Milestones Are Needed to Raise a Series A? – AGILEVC

There’s no magic formula for a successful Series A unfortunately. But these five tenets can help internet / software entrepreneurs increase their prospects. (1) Core team ready to scale (2) Demonstrable market size (3) Repeatable, cost effective customer acquisition (4) Metric momentum (5) Plausible monetization

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Some Thoughts On Seed Investing – AVC

We like seed investments in teams and opportunities where they have built and launched a product already. We don’t like investing in a concept or participating in a round where the uses of the capital will be to build and launch a product. This means the vast majority of seed rounds are not a fit for us. We pass on a lot of seed stage opportunities because it is “too early” for us.

Nnamdi Okike (Partner @ 645 Ventures)
Charting A Path From Seed To A Competitive Series A Round | TechCrunch

Top teams gather evidence to prove that the market is large enough to sustain a multi-hundred-million-dollar exit or potentially a billion-dollar revenue company. These companies typically demonstrate this evidence through a bottoms-up market analysis, starting with evidence achieved by the company and concluding with reasonable scaling assumptions supported by accurate research and trends.

Nnamdi Okike (Partner @ 645 Ventures)
Charting A Path From Seed To A Competitive Series A Round | TechCrunch

The highest-potential seed companies marshal evidence to show that they can be at least No. 1 or No. 2 in the competitive market. This requires having a detailed awareness of competitors, and understanding their strengths and weaknesses. Intel’s Andy Grove famously stated that “Only the paranoid survive.” We find that a healthy level of competitive paranoia also characterizes the seed companies that reach highly competitive Series A rounds.

NextView Ventures (hands-on seed investor, focused on internet-enabled startups)
Winning Strategies Startups Use to Raise Series A [VC Portfolio Data]

There are four strategies to raising a Series A: show audience growth, show revenue growth, show attractive small-scale unit economics, sell a huge vision and an unstoppable promise.

Moisey Uretsky (Co-Founder / Chief Product Officer @
DigitalOcean)

Moisey Uretsky’s answer to How long is the due diligence process with Andreessen Horowitz? – Quora

With that in mind after we had the term sheet signed it was about 30-45 days of due diligence for the close, which is the standard and typical timeline.

Moisey Uretsky (Co-Founder / Chief Product Officer @
DigitalOcean)

Moisey Uretsky’s answer to How long is the due diligence process with Andreessen Horowitz? – Quora

Ensuring that our accounting and projections were on point, having their analysts review the market segment to review the competitors, and then of course dotting all of the legal i’s and t’s around articles of incorporation, employment agreements, and any other legal documents that while standard, are also incredibly important to have in other.

Raju Rishi (General Partner @ RRE Ventures)
When Revenue Isn’t The Answer

Too frequently, entrepreneurs and investors alike believe that the goal of a Seed Round is to get a startup to the Series A. It’s not. Seed Rounds are the only time in the lifecycle of a startup where you are allowed, expected, even encouraged to test your product in search of real product/ market fit.

NextView Ventures (hands-on seed investor, focused on internet-enabled startups)
Winning Strategies Startups Use to Raise Series A [VC Portfolio Data]

The average amount of money [raised in Series A] was 5.2M dollars

What’s the best way to form your initial team?

Paul Graham (Co-Founder & Partner at Y Combinator)
Before the Startup

You can, however, trust your instincts about people. And in fact one of the most common mistakes young founders make is not to do that enough. They get involved with people who seem impressive, but about whom they feel some misgivings personally. Later when things blow up they say “I knew there was something off about him, but I ignored it because he seemed so impressive. “

Ben Erez (Product at Breeze)
22 Mistakes I Made as a First Time Founder — Viabilify

The first few months starting a company with your friends is an absolute blast. I mean who wouldn’t want their daily schedule to revolve around hanging out with their best friends? As it turns out, if after a few months little to no significant progress has been made, you start getting over the whole “working with friends” thing.

Ben Yoskovitz (VP Product at VarageSale, VP Product at GoInstant (acquired by Salesforce), Author of Lean Analytics)
Single Founders or Co-Founders?

Why are 2+ founders (potentially) better? For me it’s about the camaraderie and partnership that emerges when two (or more) people decide to go on such an incredible journey together. And when the going gets tough (and it always does), it’s nice to have someone sitting beside you in the dark who knows exactly how you feel.

Ben Yoskovitz (VP Product at VarageSale, VP Product at GoInstant (acquired by Salesforce), Author of Lean Analytics)
Single Founders or Co-Founders?

So what about single founders? Single founders have an advantage in that they don’t need to build consensus with other founders. They may need to bring in additional senior talent, often on the technical side (which has its own challenges), but they’re 100% in control. There’s something just simpler about it overall.

David Jackson (Founder, Seeking Alpha)
Which is better, single founder or co-founders? | A Founder’s Notebook

Seeking Alpha is a sole founder startup, but I’ve found that my relationships with some key people have developed into co-founder-like relationships

David Cummings (Managing Partner at Shotput Ventures)
Startups Should Say No to 99% of Partnership Opportunities | David Cummings on Startups

Startups should say no to 99% of partnership opportunities. Most partnerships never go anywhere and don’t make sense for the startup to invest significant effort into the relationship due to being time and money constrained. Partnership opportunities do make sense when there is significant skin in the game on behalf of the partner (e. g. large up-front fees) or a super minimal way to work together (e. g. less than 20 hours of work to get somethin… (read more)

Dharmesh Shah (Co-founder and CTO of HubSpot)
Happy Birthday HubSpot! 9 Lessons From Our First 9 Years

Don’t defer the hard co-founder questions for later. They only get harder. Have the important conversation(s) with your co-founder early. Topics might include long-term goals, fund-raising, equity allocation, vesting, etc. I’ve written an entire article with some of the questions co-founders should ask each other.

David Jackson (Founder, Seeking Alpha)
Why startup founders should learn to code | A Founder’s Notebook

Startup founders should learn to code

Jason Lemkin (Managing Director at Storm Ventures, SaaStr.com)
Jason Lemkin: The Right Metrics For Your SaaS Startup | InsightSquared

It’s going to be a 7 to 10 year journey. Take your time. First, whatever you do, make sure you get the right team. As we’ve talked about, going it alone is really tough.

Paul Graham (Co-Founder & Partner at Y Combinator)
Startups in 13 Sentences

Pick good cofounders. Cofounders are for a startup what location is for real estate. You can change anything about a house except where it is. In a startup you can change your idea easily, but changing your cofounders is hard. [1] And the success of a startup is almost always a function of its founders.

Sam Altman (President at Y Combinator)
Non-technical founder? Learn to hack – Sam Altman

When non-technical solo founders say “I’ll do whatever it takes to make this business successful” (which they almost always say), I say something like “Why not learn to hack? Although it takes many, many years to become a great hacker, you can learn to be good enough to build your site or app in a few months.

David Jackson (Founder, Seeking Alpha)
The danger of sole founder startups | A Founder’s Notebook

Seeking Alpha is a sole founder company. But we’re doing really well. Which makes me wonder what the problem is with sole founders, and how we mitigated that.

Paul Graham (Co-Founder & Partner at Y Combinator)
Why to Not Not Start a Startup

If you don’t have a cofounder, what should you do? Get one. It’s more important than anything else. If there’s no one where you live who wants to start a startup with you, move where there are people who do. If no one wants to work with you on your current idea, switch to an idea people want to work on.

Ron Conway (Founder & Co-Managing Partner @ SV Angel)
Ron Conway, Mike Maples Jr. – Angel Investing Revealed by Stanford eCorner | Free Listening on SoundCloud

There’s almost no companies with a single founder. Find some other people who are like-minded.

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

Split the stock between the founding team evenly.

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

Always have a vesting schedule.

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

Secondly, along the same vein, if you’re starting the company with co-founders, you want to have clear vesting and rules for termination. If you have other co-founders, you should have rules where if something’s not going right, if they’re not showing up for work, that you guys have as adults, put something together. If you have a co-founder that’s no longer showing up, but they own half the company, that can be hugely problematic. Also, I’ve see… (read more)

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

Your employment agreement – this is where the key and this is another place where I made a major mistake. My recommendation is some time you incorporate and sometime around the time you’re closing your Series-A financing that you come up and put together a robust employment agreement. If you think about your relationship with the company, you’re likely being engaged to that company longer than most of your personal relationships. This is more of … (read more)

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

One of the key terms that should be in your employment contract is a cure provision. Effectively, a cure provision is that if there’s something wrong and the board wants to terminate you, you have time to actually mitigate it. They give you fair notice, you have a dialogue, you understand what the issue is and you have time to mitigate it. It’s an incredibly fair term in my opinion and something that should be in everyone’s employment contract.

Peter Thiel (Co-Founder & Partner at Founders Fund)
PAYPAL MAFIA: Reid Hoffman & Peter Thiel’s Master Class at CEIBS – YouTube

People often ask these questions about traits entrepreneurs have and I think they often have on these things are almost opposite traits that are almost combined. So you want to be very open minded but you also have to be somewhat stubborn. You want to iterate very quickly and change things very quickly but you also want to have some sort of a long-term strategy.

Phil Libin (Co-Founder & CEO of Evernote)
“The Six Crucial Questions for Every Startup Entrepreneur”, by Phil Libin (CEO of Evernote) on Vimeo

You very likely will work really really hard. The hardest you’ve ever worked. In your life, on an idea, for 3,5, 10 years and walk away with nothing. That is the most likely outcome. If you can get behind that. Then you should be an entreprenuer.

Lee Hower (General Partner of NextView Ventures)
Playing Startup – NextView Ventures

I fear a meaningful number of people are “playing startup” today. What I mean is that people are joining startups because working in a startup seems cool or lucrative, not because they want to change the world and they’re fundamentally committed to putting in all the blood, sweat, and tears that entails.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Similarities Between Building and Scaling a Product and a Company – AVC

Putting together the initial team, creating the culture, instilling the mission and values into the team are all like designing and building the initial product. It is largely about injecting your ideas, values, and passion into the team. You do that by selecting the people carefully and then working hard to get them aligned around your vision and mission. Putting a product into the market and building your initial team are largely about realizin… (read more)

Ron Conway (Founder & Co-Managing Partner @ SV Angel)
Ron Conway, Mike Maples Jr. – Angel Investing Revealed by Stanford eCorner | Free Listening on SoundCloud

Start with three people, at the end of year one it shouldn’t more than 5 or 6. Companies are most productive when they are less than 10 people.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Management Team – While Building Product – AVC

Building product is not about having a large team to manage. It is about having a small team with the right people on it. You need product, design, and software engineering skills on the team. And you need to be focused, committed, and driven. Management at this point is all about small team dynamics; everyone on board, working together, and getting stuff done. Strong individual contributors are key in this stage. Management skills are not a requ… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
If You Aren’t Technical, Get Technical – AVC

A few years ago, I was doing some sort of public speaking thing and in the Q&A, a young man asked me for advice for founders who aren’t technical. I said, “If you aren’t technical, I suggest you get technical” And I meant it. I learned to code when I was a teenager. It wasn’t that hard. I think anyone who has the motivation to start a company can find the motivation to learn to code.

Aaron Patzer (Founder & CEO of Fountain, Mint)
Aaron Patzer lays bare Mint’s numbers – YouTube

I lived on less than 30k a year here in Silicon Valley [during the working in a garage phase of Mint.com]