Securing Series A funding in today's dynamic market presents unique challenges for startups. With the AI boom reshaping industries and investors becoming increasingly selective, the bar for early-stage capital has significantly risen. At TechCrunch Disrupt, a panel of leading venture capitalists—Thomas Green of Insight Partners, Katie Stanton of Moxxie Ventures, and Sangeen Zeb of GV—shared their essential criteria for founders looking to raise a Series A round.
The current funding landscape reveals a clear trend: while fewer Series A rounds are being closed, the average deal size has expanded, as noted by Green, citing recent studies. Katie Stanton emphasized the paradox of the modern startup world, stating:
“It has never been easier to start a company, and it has never been harder to build something that is defensible.”
Sangeen Zeb outlined GV's rigorous evaluation process, which centers on a startup's achievement of product-market fit. The firm meticulously analyzes demand patterns, seeking consistent quarter-over-quarter growth.
“That sequence should be happening consistently,”
Zeb stressed. Stanton reinforced this perspective, asking:
“Can you prove that you can repeatedly sell? Can you prove that you can repeatedly grow in a big and growing market?”
However, Thomas Green offered a crucial caveat: not every company is suited for venture-scale growth. He advised founders to consider the true potential of their business before seeking significant capital.
“It’s not worth even taking this money unless you think it can be a really big business, right? Most companies should not [pursue] venture scale. They should not take hundreds of millions of dollars.”
Beyond financial metrics and market traction, all three investors underscored the paramount importance of founder quality. Katie Stanton seeks passionate founders with the resilience to navigate the arduous journey of company building. Sangeen Zeb concurred, asserting:
“Passion is still the most important thing.”
The conversation naturally shifted to the pervasive influence of AI in the startup ecosystem. Green offered reassurance to non-AI companies, stating:
“Just because you’re not AI doesn’t mean you don’t have a very attractive asset, intrinsic quality to you.”
For AI startups navigating a crowded market, Green emphasized a return to first principles:
“We try to understand, if it’s a market with a lot of competition – [including] both incumbents and next-gen competitors and platform players – what is going to be the standout path?”
Stanton specifically looks for founders who possess a strong combination of industry insight and technical expertise. Zeb, on the other hand, prioritizes relentless drive, seeking entrepreneurs who are perpetually focused on outpacing the competition.
Despite market fluctuations and evolving trends, the panel concluded that core investor priorities remain steadfast. As Green summarized:
“The bar is high, but if the outcome can be impossibly huge, we’ll take that [bet].”
