We see roughly 800 enterprise software deals a year at the Series A stage. We make four to six investments annually. The filter is tight, and the criteria are specific. Most founders pitching us have heard the generic version of what investors want — strong ARR growth, large TAM, defensible moat. That is the vocabulary, not the analysis.
Here is what we are actually looking at.
ARR Is a Lagging Indicator
When a founder opens with "$2.4M ARR growing 180% year over year," that number tells us almost nothing on its own. We immediately want to know: is that growth from new logos or expansion? What is the average contract value? How long is the sales cycle, and who signs? What is the churn rate on the first cohort that is now eighteen months old?
The founders who can answer those questions confidently — who already think in those terms before we ask — are the ones we spend more time with. The ones who have to go back to their spreadsheet for every number are telling us something important about how the business is actually being managed.
Net revenue retention is the single metric we weight most heavily at Series A. An NRR above 120% in a ten-customer base tells us customers are expanding. That is evidence the product integrates, creates dependency, and generates visible value — the three conditions that produce a large enterprise software company over time. An NRR below 100% at Series A in enterprise software is a serious problem. You can have a great story about product-market fit, but negative NRR means your existing customers are telling a different story with their wallets.
The First Five Customers Are a Diagnostic
We do reference calls on every deal we get serious about. Not the three names on the founder's prepared reference list — we find our own contacts at the customer companies and call them directly. What we are looking for is specific.
Did the customer get value in the first 90 days? If the answer is "we are still implementing," that is a red flag about deployment complexity or product maturity. Enterprise software that takes 18 months to show value has a serious churn risk profile baked in.
Who is the champion internally, and what happens if they leave? Champion departure is the number one reason early enterprise contracts do not renew. If the product's value is so tied to one person's evangelism that it collapses when they move on, the retention economics are fragile. The best products become infrastructure — multiple people at the customer depend on them for daily work, and the champion's departure creates a succession of champions rather than an exit clause.
Did the customer expand their contract proactively, or did the sales team have to drive it? Expansion that happens without selling effort is the clearest signal that the product has genuine operational value.
Team Composition at the Series A Moment
By Series A in enterprise software, we want to see a founding team that has solved the initial technical problem well enough to acquire customers — and at least one person who has felt the pain of selling to enterprises before. Not necessarily from the sales side. Sometimes it is a founder who spent years at a large company and knows what it takes to get a vendor through procurement, legal review, and security audit. That experience shapes the product in ways that matter: the right logging for compliance audits, the right single sign-on integrations, the right data residency controls.
What we are less interested in at this stage is a very senior go-to-market hire brought in to "build the sales machine." We have seen this pattern fail more often than it works. A VP of Sales from a large established software company who has never sold a product without brand recognition often struggles in the first 18 months. The scrappy direct selling that got you from zero to $2M ARR is not done yet — it needs to continue while you simultaneously figure out what a repeatable sales process looks like for your specific product.
Market Timing and the Incumbent Question
Every enterprise software market has incumbents. We are not looking for markets where there is no competition — that usually means there is no market. We are looking for markets where the incumbent has a structural disadvantage: legacy architecture, a pricing model that creates friction, or a buyer profile that no longer matches who is making purchasing decisions.
The most compelling Series A deals we have done share a common setup: a ten to fifteen year old incumbent with a product built for a world that no longer exists, facing a new generation of buyers — typically engineering leaders or platform teams — who have zero interest in the old vendor's sales motion or contract structure. That mismatch between how the incumbent sells and how the new buyers want to buy is where we find the wedge.
What Makes Us Pass
Since we pass on far more deals than we fund, it is worth being direct about the patterns that kill deals quickly.
- A story entirely about the size of the market with weak evidence that anyone is actually buying
- Customer counts that include pilots, trials, and "letters of intent" as though they are equivalent to paying contracts
- A founding team that has been working on the product for three years but cannot explain why each of their five customers chose them over alternatives
- A product that requires the customer to change how they work significantly, without a clear forcing function for why they would do that
- Gross margins below 65 percent, which usually means the product has too much services dependency to scale without proportional headcount growth
None of these are automatic deal-killers in isolation. All of them, combined, mean we are not the right investor for the deal at this stage. That is the more common outcome: not that the company is bad, but that it is not ready for what comes after a Series A investment from a firm with our expectations.
The best founders we work with do not need us to explain what signal looks like. They already know. They built the business to produce it.
