Prepare to Raise Your Series A

When you’re raising a Pre-Seed or Seed round, it really all comes down to the founder. At Series A it’s still about the founder—plus clear indicators that things are ready to scale.

We’ve broken it down into four simple pillars:

• Solid PMF

• Capital Efficiency

• Sales Efficiency

• NRR

  
  

Solid PMF

The easiest way to show this is with revenue (ARR) between $1 M and $5 M—and a fast path to get there.

If it took you three years to reach $1 M in ARR, it suggests a grind with lots of convincing and no escape velocity.

If it took you three months to reach $1 M in ARR, investors will be excited by that trajectory.

Capital Efficiency

No one expects you to be profitable yet (bonus points if you are), but you must show you’ve been a good steward of capital.

A simple metric is your burn multiple.

Calculate it by taking last month’s net burn and dividing it by new ARR. If you burned $100 K last month and added $50 K of ARR, the burn multiple is 2—too high, meaning you’re spending too much.

Burn multiple < 1.5× signals best-in-class efficiency; Series A winners average 1.0–1.7×.

Sales Efficiency

A quick way to show your marketing spend isn’t out of control is to reveal your magic number.

Magic Number = (Revenue Current Quarter – Revenue Previous Quarter) ÷ Previous Quarter Sales & Marketing Spend

It shows whether last quarter’s marketing spend drove this quarter’s revenue efficiently.

A Magic Number ≥ 0.75 tells investors each $1 in S&M turns into $1 of new ARR within a year. The bigger, the better. If you can show you spent $1 and got $2 of new ARR, that’s ideal.

Retention, Retention, Retention

Investors want to know today’s revenue will stick. The simplest proof is data on renewals, expansions, and contractions.

NRR = Starting MRR – Contraction + Expansion – Churn

If NRR is above 100 %, expansions outweigh churn and contraction, indicating customers will stick around.

Summary

Show investors you’ve found something the market rushes to buy, that you haven’t had to convince the market by dumping money into marketing, and that you’ve treated capital wisely—with the cherry on top that your customers will stay.

FAQs

1. What metrics should I have before raising Series A?
   Investors expect clear signals of scale: product-market fit, capital efficiency (e.g. burn multiple < ~1.5×), strong sales efficiency (e.g. a healthy “magic number”), and net revenue retention (NRR) above 100%.

   
   

2. What is burn multiple and why does it matter?
   Burn multiple = last month’s net burn ÷ new ARR added. It measures how efficiently you turn capital into growth. A lower burn multiple demonstrates disciplined spending and stronger capital leverage.

   
   

3. Why is net revenue retention (NRR) critical at Series A stage?
   NRR shows how well your existing customers stick, expand, or contract. When NRR is above 100%, you’re growing revenue from within your base which is something investors love to see.

   
   

4. How far in advance should I start preparing to raise Series A?
   Generally, it’s wise to begin fundraising preparations 6 months before you anticipate closing the round. This gives time for modeling, diligence, and iterating your storytelling. (Many fundraising guides suggest this timeline.)