What It Takes to Raise a Series B Today

Insights from top Series B investors on navigating the current fundraising climate.

DEAR STAGE 2: We've built a solid foundation post-Series A and are now gearing up for our Series B. The fundraising environment feels tougher than ever. What does it take to raise a B round in today's market? ~Navigating Series B

DEAR NAVIGATING SERIES B: You’re not alone in feeling the pressure - the bar has been raised for fundraising. The path to a successful Series B has shifted, with higher expectations and more scrutiny on both growth and financial efficiency. To tackle this question, I tapped into our network of Series B investors: Jaclyn Freeman Hester from Foundry, Rachel Geller from Insight, Sai Senthilkumar from Redpoint, and Lisa Xu from Threshold. Together, they’ve painted a clear picture of what Series B investors are looking for—and how to prepare.

Here are some themes that emerged from our discussion:

1. Founder Characteristics

While growth and financial performance are important, Series B remains a founder-focused investment stage. These investors called out critical traits they look for spanning vision, execution, integrity and many more. A few core areas of focus:

• Leadership Talent and Team Building: By this stage, founders need to demonstrate they’ve attracted high-caliber peers who own significant pieces of the business. This signals the company is prepared for the complexities of scaling.

• Alignment Between Skills and Business Needs: Investors value founders who have a clear spike in their expertise and can translate that strength into solving the business’s most critical challenges. The best founders have a unique mix of vision and an ability to execute.

• Passion and Resilience: The ability to lead through challenges, pivot when necessary, and maintain energy and commitment is a key indicator of long-term potential.

Fundamentally, Series B isn’t just about where your business is today—it’s about proving you have the leadership to build what’s next.

2. Telling Your Story

Every investor you speak with is going to need to check the box on traditional metrics like ARR, growth, and retention (more on this later!), but investors each have their own ‘non-standard’ signals they care about and that are critical to making an investment. These are nuanced indicators of performance and scalability honed over many deals and working with many companies and founders. This is a huge opportunity to find the right partner and to tell your story!

Here are a few examples of signals I heard from Series B investors:

• Team Maturity: Investors look for evidence that the team is leveling up. This might mean adding experienced operators in leadership roles or refining the organizational structure to handle growth.

• Customer Feedback on Product Value: The way customers articulate the value of your product—whether through testimonials, case studies, or quantified ROI—offers a deeper understanding of product-market fit than numbers alone.

• Efficiency of Spend vs. ACVs: Spending relative to annual contract values (ACVs) can signal market pull and product-market fit, particularly in enterprise-focused companies with high ACVs.

• S&M Efficiency: How many S&M dollars does it take to yield $1 of new ARR? Both the absolute number and the trendline over time matter.

• Geographic Trends in Team Composition: fully remote teams are increasingly under scrutiny, as some investors are seeing meaningful performance benefits to working in an office, or at least in geo-based hubs.

Founders should prepare for investors to dig into these areas, often supplementing their analysis with direct customer conversations to validate your story.

3. Good vs. Great Performance Across Key Metrics

While benchmarks vary by context, certain metrics indicate good versus great performance for Series B companies, reflecting both operational discipline and scalability:

Rarely are businesses exceptional on all dimensions, so it's critical for founders to understand the strengths of their business and position it accordingly. For example, a slower growth company ith 100% GRR will be compelling to the right investor. And remember, smaller companies typically need higher growth rates, and consistent quarter-over-quarter momentum can matter more than absolute growth numbers.

Until next week!