Raising a Series A: Nailing the Fundraising Narrative

Chase Roberts
Vertex Ventures US
Published in
2 min readNov 22, 2023
Source: the Sistine Chapel

It’s a new fundraising environment for early-stage founders. Well, newish. COVID, ZIRP, and bored investors caused Series A rounds to reach the highest valuations in history on softened progress expectations. Today, valuations and evidence of progress — revenue, adoption, or any other metric indicating forward momentum — have reverted to pre-COVID levels. Valuations have cooled, and the progress bar is higher. There is plenty of discourse about both of these points, so I’ll focus on another one: the narrative.

Founders tend to focus on tactical execution: Here’s what I should build next, how I’ll sell it, and these are the constraints to making it happen.

Investors think about themes: What market forces indicate this is a problem worth solving, what do these founders see that others don’t, how durable are these forces, and do the founders have the clarity to solve it?

Your tactics aren’t the narrative. Instead, explain why this category matters and why you’re poised to win it. A strong narrative has three elements:

  1. What are the problems, and who has them?
  2. Why are they desperate to solve these problems?
  3. This is what success looks like if we solve them.

While features are important, they’re an implementation detail. Instead, compose these elements with a linear story, highlight an observable or pending market shift if applicable, and avoid empty abstractions.

Empty:

Every company will need a better tool for X¹.

Not empty:

These problems affect large industries like pro services, retail, tech, etc. (or describe a persona like “engineering leaders at every company with more than five developers”). The demonstrable negative business impact of not solving this problem is $XX. Finding solutions to these problems will support a large company, and here’s the math². This is the gap between the product we have today and the ideal solution to these problems, and here’s evidence that we can close this gap.

It’s tempting to assume that what’s obvious to you as founders is also obvious to investors. Even if prospective investors have expertise, they inevitably lack clarity about the future you’re trying to create. There are some categories where the opportunity is understood, but even those require founders to demonstrate why they’re building a unique asset and what gives them the right to capture market share.

Your company is a bet on the future. So, show investors why this future is worth betting on.

[1] “X” indicates a problem space. I’m not referring to the company formerly known as Twitter.

[2] The business impact of not solving the problem is a proxy for willingness to pay. The first sentence indicates who values this problem (ICP = ideal customer profile), so the math should multiply the ICP volume by the willingness to pay ($XX).

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