Let’s not sugarcoat it: 90% of founders who raise a seed round will fail to raise a Series A. That's not a guess, that's the brutal reality of the numbers. I've seen it from every possible angle. As a founder, I failed to raise a Series A for my first company. It was a painful, soul-crushing experience. I made every mistake in the book. It took me 14 more attempts, across two more companies, to finally crack the code. Now, as an investor in over 200 companies like Anthropic, OpenAI, and Scale AI, I see the same mistakes being made over and over again.
This isn't another generic blog post about "following your passion." This is a playbook. It's the exact framework I use to advise my portfolio companies, and the one I wish I had when I was starting out. If you want to be in the 10% that make it, you need to stop thinking like a founder and start thinking like an investor.
The Sobering Numbers
The venture landscape in 2026 is more competitive than ever. We're seeing a flight to quality. VCs are making fewer, bigger bets. The bar for a Series A has been raised significantly. A few years ago, you could get away with a good story and some early traction. Now, you need to have your house in order. I'm talking about real, hard numbers.
- The Series A "Crunch" is real: Studies are showing that as few as 15% of seed-funded companies will successfully raise a Series A. For SaaS, it can be as low as 12%.
- The ARR bar is higher than you think: Forget what you read on Twitter. For a decent Series A valuation in this market, you need to be looking at $3 million+ in Annual Recurring Revenue (ARR). I’ve seen companies with less get funded, but they are the exception, not the rule.
- AI is not a magic wand: Yes, AI is hot. But VCs are getting smarter. They're looking past the buzzwords and at the underlying business fundamentals. An "AI-powered" anything is not enough to get you funded.
The Framework: How to Be in the 10%
So how do you beat the odds? It's not about luck. It's about having a system. Here's the framework I've developed over my career.
Part 1: The Metrics That Actually Matter
Founders love to talk about their "wins." But most of what they track are vanity metrics. VCs care about one thing: growth that points to a massive, defensible business.
Here's what you should be obsessed with:
- Net Revenue Retention: Are your existing customers spending more with you over time? This is the single most important metric for a SaaS business. Anything less than 120% is a red flag.
- Customer Acquisition Cost (CAC) Payback Period: How long does it take to recoup the cost of acquiring a new customer? In this market, you need to be under 12 months. Ideally, under 6.
- Gross Margin: This shows the underlying profitability of your business. For software, you should be aiming for 80% or higher.
Don't just track these numbers. Understand them. Live them. Be able to defend them in your sleep.
Part 2: Your Story is Your Strategy
Numbers are important, but they're not everything. You also need a compelling story. A story that explains why your company exists, why it's going to be huge, and why you're the right person to build it.
Your story should be:
- Founder-led: Why are you the person to solve this problem? What unique insight do you have? I invested in Scale AI because Alex Wang had a deep, personal understanding of the problem he was solving. He wasn't just chasing a trend.
- Problem-obsessed: Don't talk about your solution. Talk about the problem. How big is it? Who has it? Why is it so painful?
- Vision-driven: Where is this all going? What's the big, audacious goal? VCs want to back founders who are thinking 10 years ahead, not 10 months.
Part 3: The Pitch Deck That Closes
Your pitch deck is not a document. It's a weapon. It's designed to do one thing: get you the next meeting. Here are my rules for a killer deck:
- 10 slides, max. No one has time for a 50-page novel.
- One idea per slide. Don't cram everything in.
- Visuals over text. Use graphs, charts, and images to tell your story.
- The "so what?" test. For every slide, ask yourself: "so what?" Why does this matter to an investor?
And for the love of God, do not send your deck as a PDF. Use a platform like DocSend so you can track who's looking at it and for how long. This is crucial for managing your fundraising process.
Part 4: Investor Relations is a Full-Time Job
This is the one that most founders get wrong. They only talk to investors when they need money. That's like only talking to your spouse when you want something. It doesn't work.
You should be building relationships with investors from day one. Here's how:
- Create a "dream list" of 20-30 investors. These are the people you'd love to have on your cap table.
- Find a warm intro. Cold emails rarely work. Find someone in your network who can introduce you.
- Send monthly updates. Even if they're not investing, keep them in the loop. Share your wins, your losses, and what you're learning. This builds trust and shows that you're a professional.
The Mistakes I Made (So You Don't Have To)
I learned all of this the hard way. Here are a few of the biggest mistakes I made in my early days:
- Chasing "hot" markets. My first company was a social media platform for pets. It was a terrible idea, but it was a "hot" space at the time. I wasted two years of my life on it.
- Not knowing my numbers. I walked into my first Series A meeting without a clear understanding of my CAC, LTV, or churn. The investor politely tore me to shreds.
- Being afraid to have a strong opinion. I tried to please everyone. I hedged my bets. I came across as weak and unfocused.
The Only Thing That Matters
Raising a Series A is not about having the perfect deck or the perfect metrics. It's about convincing a small group of people that you are an unstoppable force of nature. That you will not quit, that you will not be denied, and that you will build a massive, world-changing company.
So, are you ready to be in the 10%?
Frequently Asked Questions
Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.