No, It’s Not Any Harder to Get Funded Today. Not Really.

So many on social media are lamenting how much harder it is to raise venture funding today than it used to be.  And the data nominally suports it.  Statistically, raising a Series A is 2x as hard or harder than it was in 2021.

But that doesn’t really mean it’s harder.

We’re confusing two things.

First, the bar to get venture-funded in B2B / SaaS has basically always been the same my entire career.  T3D2 or better.  Or if you are < $1m ARR, some reasons to believe you are on that track.

Triple, Triple, Double, Double.  Or Better.  That’s always been the bar to get funded in SaaS.

I.e., going at least from:

• $1m to $3m ARR one year
• $3m to $9m ARR the next (hard)
• $9m to $18m ARR the year after
• $18m to $36m ARR the year after that

Yeah, that’s an incredible four year run.  And the vast majority of folks won’t hit that, and it’s not the end of the world.  But if you run that math out — that’s what it takes to compound to IPO in 10-12 years, to get to $200m ARR growing 50% or more.  Which is the bar to IPO today and for VCs to make enough money for their business model to work.  VCs need true unicorn exits — just to survive.

What seems hard is that so, so many folks were on the T3D2 track in 2020-2021 and just fell off it after.  

And they just aren’t fundable today anymore.  That’s not “harder”.  The bar is the same.  It’s just many that met the bar before .. no longer do now.

Understand T3D2.  That’s the bar for VCs to make money.  So that’s what they have to hunt.