Are you a seed-stage startup aiming for a Series A, but the milestones seem out of reach? You’re not alone.
According to Carta’s Peter Walker, fewer than 15% of startups reach Series A in under 24 months. This isn’t changing any time soon.
Image provided by Carta, Valor’s Fund Administrator, created by Peter Walker
Accelerating From Seed to Series A
Here are my 3 tips for accelerating your next round, based on experience with Valor VC portfolio, where some of our portfolio startups recently soared from seed to Series A in under a year:
🎯 1. Prioritize growth by focusing on the customer segment that can achieve triple-digit, quarter-over-quarter growth. You may need to “leave some money on the table” today to capture it later. Optimize your sales organization to excel at one type of deal that drives the fastest growth. Avoid selling to multiple customer types and delay targeting slow buyers until after your Series A. It feels scary to cut back on a type of customer you know you can close: do it anyway. You have to focus.
🏃♀️ 2. Run lean, and lean into equity. The seed round you raised was never meant to last 36 months. Adjust by rewarding team leaders who believe in the value of their future equity. Offer generous equity with milestones and vesting schedules, and minimize salaries in favor of bonuses and commissions aligned with customer success.
🛌 3. Foster a culture that supports healthy breaks and a life outside of work. No one can sustain a 36-month sprint. Many great salespeople and CEOs are facing burnout, not due to inability to handle pressure, but because the journey is longer and harder than expected, and the company constantly facing running out of cash can destroy confidence even when you have a plan. So normalize rest and taking a breather (weekends, vacations, hybrid schedules, etc.) to help your team endure the marathon — and what has actually become the ultra-marathon of startup financing.