Everyone Will Want to Fund You at $10m ARR. But Maybe Not Before.

In this era of unprecedented unicorn production and public SaaS multiples, where it looks like every Series A on TechCrunch is $30m+, it can seem like getting venture funded must be easier than ever.

It isn’t.

Let’s be 100% clear on two things:

  • Almost all the money is going into obvious startups.  The ones already winning, or starting to with proven teams; and
  • There are 10x more SaaS startups than just 24 months ago.  So VCs have even less time to work on non-obvious ones.  Yes, there is so much more money in venture.  But there are even more startups.

So just one simple point: raising almost infinite venture capital is the easiest ever in the history of time — once you are obvious.

What if you aren’t obvious?  What if your space is boring?  Your team unproven?  Your growth good, but unevent?

You’ll still struggle even today.

Until … maybe even until $10m ARR.  That’s the converge point in SaaS.  Where Series B/C/D/E investors no longer really even care what you do.  They care about ARR, growth, NRR and capital efficiency.  That’s really it.

Get to $10m ARR, growing 100%, with 110%+ NRR, and you’ll get plenty of funding at a great price today.  And if that’s far away, I hear you.  But you’ll get there.

But that doesn’t mean you’ll be “Obvious” even at $4m-$5m ARR.  You may struggle to get even 1 term sheet, even then.

It’s OK.  They’ll look back and regret the deal they lost once you cross $10m ARR.

Published on September 25, 2021

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