What VCs look for at pre-seed, seed and Series A.

Every VC asks the same few questions. What changes from stage to stage is the evidence they expect to see. The earlier you are, the more they back the team and the market; the later you are, the more they back the numbers.

The questions behind every decision

1. Team. Why are these people the ones to win this? Relevant experience, insight into the customer, and the ability to recruit and sell.
2. Problem and market. Is the problem painful and frequent, and is the market big enough to produce a company worth hundreds of millions? See the power law.
3. Product and insight. What do you know that others have missed? Why now?
4. Traction. Evidence that customers want it: usage, retention, revenue and growth.
5. Business model. Can the company make good margins and win customers for less than they are worth? Our unit economics calculator helps you check.
6. Fit with the fund. Stage, sector, geography, cheque size and whether the potential exit can move their fund.
7. Terms. Can they buy enough ownership at a price that still allows the return they need? See how VCs value companies.

Stage by stage

Expectations move with the market. For UK SaaS, investors have often looked for around £1m to £2m of annual recurring revenue before a Series A, growing fast (a rule of thumb, not a rule). Our posts on MRR expectations for investment rounds, pre-seed vs seed and classifying investment rounds go deeper.

How a VC process usually runs

1. First look at a deck, often in a few minutes. Warm introductions get more attention than cold emails.
2. First meeting with an associate or partner.
3. Deeper meetings, customer calls and a look at your numbers.
4. Partner meeting or investment committee.
5. Term sheet, then due diligence and legal documents. See term sheets explained and due diligence.

From first meeting to money in the bank, three to six months is common. Start before you need the cash: the runway calculator shows when that is.

What puts VCs off

• A market too small to produce a big outcome.
• A cap table where the founding team already owns too little to stay motivated.
• Numbers that do not tie together, or assumptions you cannot explain.
• Asking for a valuation the stage cannot support.
• Raising with less than six months of cash left, which weakens your hand.

General information, not financial, legal or tax advice. Figures marked as rules of thumb vary by fund, sector and market conditions.