Consistency, Scalability, Momentum - What Investors Seek at Series A

Consistency, scalability, momentum - these three things provide VCs with confidence when making an investment at Series A.

Not only are these things VCs look for at Series A, they also provide guidance to founders to know when the time is right to go out and raise.

Here’s what you need to achieve to demonstrate consistency, scalability, and momentum to potential investors.

Consistency

Consistency reflects your capability to deliver growth and meet milestones over time. At Series A, a company’s ability to consistently deliver growth and meet predetermined milestones over time is key. It reflects not only the efficacy of the business model but also the competence of the team in executing its strategy. Consistency in performance reassures potential VCs that the business is capable of weathering storms and adapting to challenges. It highlights the reliability of revenue streams, customer acquisition strategies, and overall business efficiency.

Scalability

Scalability refers to the ability to capture a significant market share without a proportionate increase in resources. Essentially, scalability is significant for potential investors as it indicates the potential return. Different funds have different return expectations so this allows them to determine whether it’s a suitable opportunity. While you need to demonstrate scalability, it’s also vital to phase your scale activity. Double down on the things you know and can evidence and focus on delivering that. Taking this approach and phasing your activity will help de-risk your business for a VC.

Momentum

Momentum demonstrates business traction including revenue growth and increasing customer acquisition. It encompasses various aspects of business traction, including revenue growth and increasing customer acquisition. These metrics provide tangible evidence of momentum, indicating that the company is addressing a genuine need and delivering value to its customers, e.g. they’ve found product-market fit. By demonstrating consistency in execution, scalability in operations, and momentum in business traction, businesses are able to chart a course towards sustainable success and attract the attention of potential investors.

Thanks to Puma Growth Partners, Octopus Ventures, Beringea, and AlbionVC for sharing these insights.