Investors share what to remember while raising a Series A

Securing Series A funding has become increasingly complex in today's shifting market, where the stakes have risen and investors are more selective than ever, driven largely by the transformative impact of the AI boom. During a discussion at TechCrunch Disrupt, three prominent investors — Thomas Green from Insight Partners, Katie Stanton of Moxxie Ventures, and Sangeen Zeb from GV — shared their insights on what they will prioritize in the upcoming year. Recent data reveals a notable trend: while fewer funding rounds are being completed, the size of deals has increased significantly. Green highlighted this shift, stating, "It has never been easier to start a company, and it has never been harder to build something that is defensible." Stanton added that understanding product-market fit is crucial and emphasized the importance of consistent performance in demand metrics. Zeb explained GV's systematic approach to evaluating startups, which involves scrutinizing their product-market fit and ensuring they demonstrate quarter-over-quarter growth. Both Stanton and Zeb stressed the necessity of proving the ability to sell and expand within a large, growing market. However, Green offered a word of caution, reminding founders that not every business model is suited for venture-scale growth. "It’s not worth even taking this money unless you think it can be a really big business," he advised, suggesting that most companies should not seek hundreds of millions in funding. The quality of the founding team also emerged as a critical factor for investors. Stanton is particularly interested in passionate founders who can withstand the trials of building a startup. Zeb echoed this sentiment, stating, "Passion is still the most important thing." The conversation inevitably turned to the topic of AI, with Green reassuring non-AI startups that they still possess valuable qualities, regardless of their industry focus. For AI companies, the challenge lies in distinguishing themselves in a saturated market. Green emphasized the need to return to fundamental principles to identify unique paths to success amid fierce competition. Stanton seeks founders who blend industry knowledge with technical prowess, while Zeb looks for relentless ambition in founders who are eager to outpace their rivals. Despite the fluctuations in the market, the panel agreed that essential investor priorities remain steadfast. "The bar is high, but if the outcome can be impossibly huge, we’ll take that bet," Green concluded.