Series A Funding Checklist For Founders

Series A funding is where startups move from proving their concept to scaling their business. But only 10–15% of seed-funded startups secure Series A. Here’s what you need to know:

What Investors Want: Clear product-market fit, strong growth metrics, and a scalable business model.
Preparation Timeline: Spend 6–12 months preparing financials, legal documents, and growth milestones.
Key Metrics: For SaaS, aim for $1M–$3M ARR, 10–20% monthly growth, and an LTV:CAC ratio of 3:1.
Documentation: GAAP-compliant financials, clean cap table, contracts, and intellectual property records.
Team & Operations: Build a strong leadership team and establish scalable processes.

Timing matters. Start fundraising with 9–12 months of runway and clear traction. Use this checklist to position your startup for success.

Series A Fundraising – What Changes and How to Prepare

Investor Readiness Checklist

Before approaching Series A investors, you must show that your startup is more than just a good idea – it’s a business primed to scale. Investors will evaluate three key areas: whether you’ve achieved product-market fit, how well you can articulate your company’s story, and whether your growth metrics demonstrate strong momentum.

Product-Market Fit and Traction

Product-market fit isn’t about glowing customer feedback – it’s about numbers that prove customers find value in your product. Investors want evidence that people use your product consistently, pay for it, and keep coming back.

For SaaS startups, aim for net revenue retention above 90% and monthly churn below 5%. If you’re in the marketplace space, you’ll need to show at least 20% month-over-month GMV growth, with monthly GMV ranging from $500,000 to $2 million. Consumer apps should aim for a DAU/MAU ratio above 50%, indicating strong user engagement.

Your unit economics should clearly show sustainability. Most investors look for an LTV to CAC ratio of at least 3:1, meaning each customer generates three times the cost to acquire them. For SaaS companies, monthly recurring revenue should fall between $100,000 and $250,000, with consistent 10–20% month-over-month growth. These metrics signal that you’ve found a reliable way to acquire and retain customers profitably.

Different business models require different metrics. For hardware or deep tech startups, revenue may not yet be the main focus. Instead, you might need to show prototypes, design wins with major clients, letters of intent from enterprise buyers, or a clear path to scaling production. The goal is to demonstrate that your product solves a real problem customers are willing to pay for.

Qualitative signals also matter. Customer testimonials from well-known companies, high Net Promoter Scores, strong referral rates, and signs of organic growth help assure investors that your product is not only useful but also deeply integrated into customers’ workflows. These signals reduce perceived risks and show that your product is indispensable.

Your Story and Pitch Deck

Metrics alone won’t win over investors – you need a compelling narrative to tie it all together. Your pitch deck should explain why your company exists, why it’s poised to succeed, and why now is the time to invest. A strong Series A deck includes sections on the problem, your solution (with product screenshots or a demo), traction metrics, market analysis, business model, go-to-market strategy, competitive landscape, team credentials, financial projections, fundraising details, and your long-term vision.

Your financial model needs to be rock solid. Include three to five-year projections, with monthly detail for the first 12–18 months and quarterly detail after that. Break down revenue by product or segment, outline your cost of goods sold, and detail operating expenses for sales, marketing, R&D, and general administration. Include your headcount plan and the assumptions driving your projections, such as customer acquisition costs, churn rates, and conversion rates. Be ready to defend your assumptions with historical data and sensitivity analyses for best and worst-case scenarios.

Your narrative should feel inevitable: “Here’s the painful problem we identified, here’s how we’ve proven our solution works with real customers, here’s the massive market we’re tackling, and here’s why our team is uniquely equipped to win.” Let your data back up an ambitious yet realistic story. Avoid exaggeration – investors see through it instantly.

Prepare a one-page summary that highlights key metrics, your team, and your fundraising goals. This teaser gives investors a quick snapshot before they dive into your full presentation. Dedicate a slide to your team, emphasizing relevant achievements and complementary skills.

Growth and Momentum Metrics

Investors want to know your growth is predictable, repeatable, and efficient – that you’ve built a scalable engine for expansion.

Start with your core growth metrics. For SaaS companies, focus on monthly or annual recurring revenue with clear growth rates. Series A investors typically look for 10–20% month-over-month growth in SaaS businesses. For marketplaces, highlight GMV with at least 20% monthly growth and evidence of liquidity on both supply and demand sides. Your growth should suggest the potential for 3–10x expansion over the next 12–18 months.

Customer acquisition cost (CAC) and lifetime value (LTV) are critical for assessing efficiency. Aim for an LTV to CAC ratio above 3:1 and a CAC payback period of 12–24 months for SaaS companies. If your payback period is longer, be prepared to explain why and how you’ll improve it as you scale.

Your sales pipeline demonstrates sustainability. Share total pipeline value, the number of qualified opportunities, win rates, and pipeline coverage relative to your quarterly targets. A healthy pipeline typically has 3–5x coverage of your next quarter’s revenue goal. For instance, if your target is $500,000, your pipeline should include $1.5 million to $2.5 million in qualified opportunities.

Churn metrics are equally important – they show whether customers find lasting value in your product. Report both gross churn (the percentage of customers who leave) and net revenue retention (which includes expansion revenue). If churn is high, explain why and what steps you’re taking to address it. Improving churn trends over time show that you’re learning and adapting.

The burn multiple – your net burn divided by net new annual recurring revenue – is increasingly scrutinized in today’s funding environment. A burn multiple below 1.5 indicates efficient growth without excessive cash burn. If your burn multiple is higher, you’ll need to justify the investment in growth and outline when you expect efficiency to improve.

Finally, be ready to explain the story behind your numbers. If you experienced a growth spike, what caused it? If growth slowed, what did you learn? Investors want to see that you deeply understand your business and can quickly identify and address challenges. This builds confidence that you’ll use their capital wisely and adapt to changing market conditions.

Financial and Metric Readiness

When it comes to investor readiness, having solid financial documentation is non-negotiable. Your financial records don’t just tell the story of your business – they prove whether it’s built on solid foundations or shaky assumptions. Series A investors will examine every detail, looking for evidence that you understand your business economics and can scale profitably. This means having detailed historical financials, creating reliable projections, and tracking the metrics that matter most.

Historical Financials and Projections

Investors will expect GAAP-compliant historical financials in USD covering at least the last 24 months, broken down monthly if possible. These financials go beyond just showing revenue – they’re about demonstrating disciplined and transparent financial management. Your financial package should include three core statements:

Income statement (P&L): Break down revenue streams, cost of goods sold, gross profit, operating expenses (R&D, sales and marketing, general and administrative), EBITDA, and net income.
Balance sheet: Outline your assets (cash, accounts receivable, inventory), liabilities (accounts payable, debt, deferred revenue), and shareholders’ equity.
Cash flow statement: Detail operating, investing, and financing cash flows, along with monthly ending cash balances to clearly show your burn rate and runway.

Additionally, provide bank statements for the last 12 months and reconciliations tying your accounting records to actual bank balances. Investors will want to verify that your reported cash is real. All figures should follow U.S. formats – for example, $1,250,000.50, with commas as thousand separators and periods for decimals.

If your financials aren’t yet fully GAAP-compliant, it’s time to collaborate with a U.S.-based accounting firm or fractional CFO to clean up your records and switch to accrual-based accounting. While a full audit might not be required at Series A, you should at least have reviewed financial statements prepared by a CPA. If you’ve transitioned from cash-based to GAAP accounting, include a bridge document explaining the changes.

For projections, prepare a 24–36 month bottom-up financial model. This should link revenue drivers to operating costs. For revenue, detail assumptions like customer counts, pricing, conversion rates, and churn. SaaS companies, for instance, should project new ARR based on sales productivity – how many reps you’ll have, their quotas, and expected attainment rates. On the expense side, include a detailed headcount plan (salaries and benefits by role) and scalable costs like marketing spend, infrastructure, and tools. Separate one-time expenses from recurring costs.

Your projections should have monthly or quarterly granularity and include cash balances that show when you’ll need additional funding. Prepare sensitivity scenarios – a base case, a downside (25–50% lower growth or higher churn), and an upside case. These scenarios show you’ve thought through different possibilities and understand your capital needs under varying conditions. Use U.S. formats for numbers and dates (e.g., 03/31/2027). These projections will lay the groundwork for discussing the metrics that validate your business model.

Key Metrics for Series A

In addition to financial statements, investors want a metrics package that confirms your business model is scalable. While the specific metrics depend on your business, there are some universal fundamentals.

For SaaS and recurring-revenue businesses, investors typically look for $1,000,000 to $3,000,000+ in ARR at Series A. Growth rates are critical – many investors want to see 8–15%+ month-over-month growth or 2–3x+ year-over-year revenue growth. Gross margins for software businesses should range between 70–85%; if your margins are lower (e.g., for marketplaces or hardware), you’ll need to explain why and outline a path to improvement.

Unit economics often trip up startups. Calculate your CAC (Customer Acquisition Cost) by summing all sales and marketing costs – salaries, tools, and campaigns – and dividing by the number of new customers acquired. A strong LTV to CAC ratio is 3:1, with a CAC payback period under 12–24 months. If possible, break down your unit economics by segment (e.g., SMB vs. enterprise, self-serve vs. sales-led) to highlight where your economics are strongest. Document all assumptions in U.S. dollars and ensure your metrics align with your GAAP financials.

Churn and retention metrics are vital indicators of customer satisfaction. For B2B SaaS, a net revenue retention rate above 100% signals that existing customers are expanding faster than others are leaving. Keep logo churn in the low single digits monthly. Another critical metric is the burn multiple – your net burn divided by net new ARR. A burn multiple below 1.0 to 1.5 reflects efficient growth; if yours is higher, be prepared to explain your investments and when efficiency will improve.

If your business doesn’t fit the SaaS mold, tailor your metrics accordingly:

Marketplaces: Focus on GMV (Gross Merchandise Value), take rate, contribution margin per transaction, and liquidity metrics for buyers and sellers. Investors typically look for 20%+ month-over-month GMV growth and improving take-rate-adjusted margins.
Hardware and deep tech: Highlight gross margin trends (e.g., starting at 30–40% on prototypes and scaling to 50–60%+), unit cost reductions, backlog, letters of intent, and payback periods for deployed hardware.
Consumer apps: Emphasize user growth, engagement, retention, and monetization metrics that demonstrate a sustainable business model.

Keep a monthly-updated metrics dashboard tied to your accounting and CRM systems. Track financials (MRR/ARR, revenue by product or segment, gross margin, burn, runway), customer metrics (new customers, churn, expansion, contraction, cohort performance), and funnel metrics (leads, conversion rates, sales cycles, win rates). Use standardized definitions and ensure your numbers remain consistent across all investor meetings. Export clear tables and charts for your data room that align with your GAAP financials.

Address potential red flags upfront. Inconsistent or restated financials without explanation will raise eyebrows – include a reconciliation schedule and explain any accounting changes. Weak gross margins with no improvement plan will deter investors – show specific steps like pricing adjustments, vendor negotiations, or product mix changes to boost margins over 12–24 months. High CAC or poor LTV to CAC ratios must be addressed with data-backed strategies to improve efficiency. If your runway is under six months, present contingency plans like cost reductions and highlight active investor discussions.

Be transparent about challenges and prepared to walk through your numbers in detail during investor meetings. Clear, honest communication builds trust and shows investors you’re ready to tackle obstacles head-on.

Team and Operations Readiness

When preparing for Series A funding, it’s not just about having strong financial metrics. Investors are equally interested in your ability to scale effectively. This means showcasing a solid leadership team, a clear plan for team growth, and operational systems designed to handle rapid expansion.

Leadership and Organization Structure

Series A investors want to see a leadership team that’s ready for the challenges of scaling. At a minimum, this includes a CEO/Founder to drive strategy, a CTO/VP of Engineering to lead technical efforts, and a VP of Sales/Head of Growth to focus on revenue. If any of these key roles are missing, you’ll need to present a plan to fill the gaps.

To further demonstrate readiness, provide a detailed organizational chart and an employee census. This should include roles, tenure, compensation, and equity details. Such documentation shows that you’ve carefully thought through how responsibilities are assigned and who is accountable for what.

A strong founding team should have a mix of complementary skills. For instance, if your team leans heavily on technical expertise, balance it out with hires or advisors who bring commercial experience. Additionally, outline critical leadership positions you plan to fill using Series A funds. Include a detailed hiring plan that specifies roles, timelines, and costs, and explain how each new hire will contribute to your growth objectives. Depending on your company’s needs, you might also consider adding a COO or an Operations lead to handle growing complexities, freeing up the CEO to focus on strategy.

Don’t underestimate the value of an advisory board or mentors. Highlight any advisors with deep industry knowledge or a history of successful exits – they signal that you have access to strategic guidance. Additionally, address any equity held by departed co-founders to avoid complications during negotiations.

Once leadership is solidified, the next step is ensuring your operational systems are built to scale.

Operations and Reporting Systems

While sound financials prove your business model works, streamlined operations show you’re ready to execute at scale. Investors want to see operational discipline, which includes strong financial controls, clear KPIs, and transparent processes.

Start by implementing a monthly close process to compare performance against your budget. Use real-time accounting tools to maintain financial transparency, and enforce spending controls with well-defined approval thresholds. Document your vendor onboarding process to keep spending organized.

Establish a core set of key performance indicators (KPIs) and track them consistently with a monthly metrics dashboard. For SaaS companies, these might include metrics like MRR (Monthly Recurring Revenue), ARR (Annual Recurring Revenue), net revenue retention, customer acquisition cost, customer lifetime value, churn rate, burn rate, and cash runway. Consistency matters – use the same definitions and calculations every month, and document any changes clearly.

Even if you don’t yet have a formal board, create a regular reporting cadence. Prepare monthly or quarterly decks summarizing key metrics, hiring progress, product updates, and financial performance. This shows your commitment to transparency and governance, which investors value.

Risk management is another critical area. Secure essential insurance policies like D&O (Directors and Officers), general liability, workers’ compensation, cyber liability, and errors and omissions coverage. Confirm that your business has all necessary licenses and complies with any industry-specific regulations. Formalize corporate policies, such as conflict of interest, insider trading, document retention, and whistleblower policies, to demonstrate strong governance practices.

To maintain clear communication across the organization, establish regular leadership and all-hands meetings. Define decision-making processes and performance management practices, such as one-on-ones and feedback sessions, to help scale your company culture effectively. Lastly, organize a well-structured data room for due diligence, ensuring all critical documents are easily accessible for investor review.

Legal, Cap Table, and Due Diligence Preparation

Once you’ve tackled operational and financial readiness, it’s time to focus on legal preparation – an essential step in your Series A checklist. Investors in this round take a much deeper dive into your legal and financial records compared to earlier stages. They’ll scrutinize your corporate structure, cap table, contracts, intellectual property (IP), and compliance measures. Any gaps in your legal documentation can delay your funding by weeks, so getting this part right is critical. Start by ensuring your corporate structure and cap table are in order before addressing contracts and intellectual property.

Corporate Structure and Cap Table

Your corporate structure needs to be straightforward and aligned with investor expectations. For U.S.-based tech startups, this typically means incorporating as a Delaware C-Corporation. Why Delaware? It’s the go-to choice for venture capital due to its established corporate laws, familiarity among investors, and a strong legal framework for governance. If you’re not already a Delaware C-Corp, it’s worth making the conversion to accommodate preferred stock, option plans, and standard VC terms.

In addition to incorporation, make sure your corporate records are fully up-to-date. This includes properly drafted bylaws, stockholder meeting minutes (or written consents for major actions), and proof that your company is in good standing with the Delaware Secretary of State and any other relevant authorities.

The cap table is another area that can trip up startups. Investors expect a detailed and accurate cap table showing all equity holders, their ownership percentages, and vesting schedules. This means keeping a current list of stockholders and ensuring every past equity issuance is documented. Your cap table should align perfectly with board-approved documents.

Common cap table issues include:

Uncapped SAFEs from early funding rounds. These need to be capped or resolved before Series A.
Equity held by departed co-founders. Unvested shares should be repurchased or forfeited to avoid complications.
Inconsistent or outdated records. Your cap table must match stock purchase agreements, option grants, SAFEs, notes, and board approvals.

Y Combinator‘s Series A diligence checklist highlights that a lot of this work often involves cleaning up informal or undocumented decisions about equity, contracts, and IP. Addressing these issues ahead of time will save you from major delays during the funding process.

To get your cap table in shape, reconcile all equity records and ensure vesting schedules align with industry norms – typically a four-year vesting period with a one-year cliff for both founders and employees. Compile a comprehensive equity file that includes a stockholder list with contact details, stock purchase agreements, option grant paperwork, exercise forms, vesting schedules, and board consents for equity issuances and option pool increases.

A well-organized cap table signals that your company is prepared and reduces concerns about future dilution or legal entanglements. Once this is sorted, shift your attention to contracts and intellectual property.

Contracts and Intellectual Property

Investors will closely examine your contracts and intellectual property to ensure your business is built on solid ground. This includes verifying that your business relationships are secure, your IP is adequately protected, and your regulatory and tax obligations are met.

Start by organizing all material contracts in a structured data room. These should include customer agreements, vendor contracts, partnership deals, real estate leases, and any debt instruments. Pay special attention to customer contracts, as they provide insight into your revenue stability and growth. Vendor agreements should be reviewed for unfavorable terms like automatic renewals or restrictive clauses that could hurt your margins.

For SAFEs or convertible notes from earlier rounds, ensure they have reasonable valuation caps and won’t lead to excessive dilution for Series A investors. Sensitive information in contracts should be redacted appropriately.

When it comes to intellectual property, investors want assurance that all IP belongs to the company – not to individual founders, employees, or contractors. This means having signed Proprietary Information and Inventions Assignment Agreements (PIIAs) from everyone involved. Your IP documentation should include patent certificates, trademark registrations, invention assignments, and a record of any open-source software used. For hardware or deep tech startups, showcasing patents, trade secrets, or design wins is especially important. Ensure trademarks for your company and products are registered under the company’s name, not an individual’s, and confirm that the company owns all domains.

Given the increasing focus on data security, conduct a security audit and, if applicable, secure SOC 2 certification to demonstrate your commitment to protecting sensitive information. This is particularly important for SaaS or data-driven businesses.

On the compliance side, prepare recent tax returns (usually covering the last two to three years), current insurance policies, business licenses, and any documentation related to industry-specific regulations. Common insurance requirements include general liability, professional liability (errors and omissions), directors and officers (D&O) insurance, cyber liability (if applicable), and workers’ compensation.

Different industries have unique compliance needs. For example, healthcare startups must address HIPAA regulations, fintech companies need to comply with financial laws, and marketplace platforms may need to handle payment processing and consumer protection rules. Make sure your business adheres to all relevant laws, including federal, state, and local regulations.

Lastly, ensure your employment documentation is in order. This includes signed offer letters for every employee, PIIAs, an employee census with names, titles, compensation, and equity grants, as well as an organizational chart. Offer letters should clearly outline compensation, vesting schedules, and at-will employment terms.

To streamline the process, set up a centralized data room well before your fundraising efforts. Organize it into categories like corporate documents, financial records, board materials, intellectual property, contracts, HR files, compliance documents, product and technology information, and any litigation history – or a statement confirming none exists. Many founders now prepare this "due diligence kit" early to ensure they can respond quickly to investor requests after signing a term sheet.

For extra preparation, consider running a mock due diligence exercise three to six months before starting your raise. This can help you identify missing documents, fix inconsistencies, and address potential risks early – showing investors you’re ready to move efficiently when the time comes.

Timing and Execution of Series A Funding

Once your legal and operational groundwork is solid, deciding when to pursue your Series A funding becomes the next big move. Start too early, and you risk approaching investors without enough traction. Wait too long, and you might run out of runway or lose momentum. A well-planned approach can help you balance these risks, build competitive interest, and manage your time effectively.

When to Start Your Fundraise

The ideal time to kick off your Series A fundraising is when you can show clear signs of product-market fit, consistent growth, and strong unit economics. Investors want to see that you’ve moved past the experimental phase and have a product that genuinely resonates with customers.

While benchmarks can vary depending on your business model, here are some general expectations:

B2B SaaS companies: $1M+ in Annual Recurring Revenue (ARR) with strong retention rates.
Marketplaces: $500K–$2M in monthly Gross Merchandise Value (GMV) with steady growth.
Hardware and deep tech startups: Functional prototypes, design wins, and defensible intellectual property (IP).

In addition to hitting these metrics, investors look for sustained growth – typically 10–20% month-over-month – that’s both repeatable and scalable. Growth driven by one-off campaigns or unsustainable strategies won’t cut it. Qualitative factors, like glowing customer references, compelling case studies, or partnerships with well-known brands, can also strengthen your case.

Timing is critical when it comes to runway. The process of raising a Series A round generally takes 3–9 months from the first pitch to closing. During this time, founders often spend more than half their time focused on fundraising. Ideally, you should start raising when you have 9–12 months of runway left. For businesses with higher capital needs or operating in uncertain markets, it’s safer to start with 12–15 months of runway.

Market timing also plays a role. Investor activity tends to slow down in late August and late December, so many founders choose to begin outreach in early January or September, when investors are more engaged. Building relationships with potential investors 3–6 months before your formal raise can also help you gauge interest and fine-tune your timing.

Once you’ve determined the right moment based on your traction and runway, the next step is to execute a structured fundraising process.

Running the Fundraising Process

Treat your Series A fundraising like a well-organized sales process. The goal is to build momentum, attract multiple investors, and secure a lead investor who can support your growth for the next 18–24 months.

Start by defining your goals. Decide how much capital you need, the valuation range you’re aiming for, and how you plan to use the funds. To calculate this, model out your operating expenses – things like headcount, marketing, product development, and overhead – for 18–24 months. These funds should help you hit major milestones, like tripling or quadrupling revenue or expanding into new markets.

In the U.S., Series A rounds typically range from $2M to $15M, with pre-money valuations between $10M and $50M. Most founders aim for 15–25% equity dilution to retain control while leaving room for future rounds.

Next, build a list of 30–50 target investors, divided into tiers:

Tier 1: 10–15 top-choice firms.
Tier 2: 15–20 firms that are a strong fit.
Tier 3: 15–20 backup options.

Prioritize firms based on their stage focus, sector expertise, check size, track record, and reputation for supporting founders.

Your outreach strategy should include a mix of warm introductions and targeted cold emails. Craft a teaser email that highlights 2–3 key metrics, such as "$1.2M ARR, 12% month-over-month growth, 130% net dollar retention", and include a link to a one-pager or pitch deck. Many founders start with Tier 2 firms to refine their pitch before approaching Tier 1 targets. Aim to schedule 2–4 meetings per day over a few weeks to maintain momentum.

Think of your fundraising as a pipeline. Standardize your pitch, track where each investor is in the process, and follow up promptly. Cluster your initial meetings within 2–3 weeks, then schedule follow-ups to create a sense of urgency. After each first meeting, send a follow-up email with your deck, key metrics, and answers to any outstanding questions. Only share access to your data room – containing detailed metrics, customer lists, and contracts – once an investor shows serious interest.

If a term sheet seems likely, inform other interested investors to speed up their process. Once you secure a lead investor and sign a term sheet, the due diligence phase begins. This includes reviews of your financials, legal documents, product or technology, and commercial operations. Investors will examine financial statements, bank records, your cap table, board materials, and financial model. Legal diligence covers your corporate structure, stock issuances, IP ownership, key contracts, employment agreements, and any litigation history. Organizing all this information in a centralized data room 6–12 months before your fundraising efforts will keep the process efficient and show investors that you’re well-prepared.

Conclusion

Getting ready for a Series A round involves focusing on four key areas: traction, financial health, operational readiness, and legal compliance. This checklist helps you pinpoint gaps and create a clear plan to position your business for success.

Start by examining your product-market fit and traction. Investors need to see proof that customers value your product. This could be demonstrated through strong retention rates, solid growth metrics, or consistent revenue. Depending on your business model, traction might mean hitting benchmarks like monthly GMV, functional prototypes, or secured intellectual property. Without this foundation, even the best financials or team won’t win over investors.

Next, ensure your financials are in order. Prepare 24 months of historical financial data and show key metrics like a healthy LTV:CAC ratio (e.g., 3:1 or higher). Investors will also expect to see projections for the next 3–5 years, outlining how you plan to use their capital to hit significant milestones. These numbers should reflect a clear path to profitability.

Operational readiness is equally vital. Investors will evaluate your leadership team’s ability to scale the business. Provide a clear breakdown of your leadership structure and operational processes to demonstrate scalability and readiness for growth.

Don’t overlook legal and corporate compliance. A clean cap table, well-documented legal agreements, and a centralized data room are essential to avoid delays during due diligence. These steps protect both your company and potential investors.

Begin addressing these areas well before starting your fundraising process. Conduct an honest assessment to identify gaps, then create a timeline to resolve them. If you lack strong product-market fit or sufficient traction, it might be better to wait – after all, only about 10–15% of startups move from seed funding to successfully raising a Series A. On the other hand, if traction is solid but operational gaps remain, focus on fixing those quickly to avoid delays.

Finally, use this checklist to determine if you’re truly ready for Series A. These rounds typically range from $2M to $15M, with pre-money valuations between $10M and $50M. Investors usually seek equity stakes of 20–40%. If your metrics and growth trajectory (commonly expected to be in the 3–10X range) don’t align with these expectations, the checklist can help identify whether the issue lies in your business fundamentals or operational readiness.

FAQs

What key financial metrics do investors focus on when evaluating Series A funding for SaaS startups?

Investors often zero in on a handful of key financial metrics when evaluating SaaS companies for Series A funding. These include Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) – both critical indicators of predictable income. Metrics like Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), and the LTV-to-CAC ratio help gauge the efficiency of acquiring and retaining customers. Additionally, they assess gross margins, churn rate, and burn rate to get a clearer picture of the company’s financial health and potential for scaling.

To stand out, it’s essential to have clear and well-documented financials that show consistent growth in these areas. Be ready to articulate how your business model supports long-term profitability and outline a solid plan for how the funding will drive scalable growth.

What are the best ways for a startup to prove product-market fit to Series A investors?

To prove your product has a strong fit in the market, focus on presenting tangible results and evidence of demand. Share key metrics like steady revenue growth, an expanding customer base, or impressive user engagement statistics. Including customer testimonials, retention rates, and data on repeat purchases can further illustrate satisfaction and loyalty.

It’s also important to show you truly understand your market. Provide insights into your target audience and competitors, backed by thorough research. Clearly explain how your product addresses a specific problem and outperforms other options. When you present solid, data-backed proof of product-market fit, you give investors confidence in your startup’s ability to grow and scale effectively.

How can founders prepare their cap table and legal documents for Series A due diligence?

To prepare your cap table and legal documents for Series A due diligence, start by making sure your cap table is accurate and current. It should clearly reflect all forms of ownership, including equity stakes, convertible notes, stock options, and any other obligations. Founders also need to double-check that all equity agreements are properly documented and signed.

On the legal front, keep your corporate records in order. This includes essential documents like your certificate of incorporation, bylaws, and board meeting minutes. Ensure intellectual property (IP) assignments are fully completed and that contracts with employees, contractors, or key partners are legally binding. If there are any gaps or inconsistencies, it’s a good idea to consult a legal expert to address them before starting the due diligence process.