The Series A Bar Has Moved Again
Investors now want $2.5 million in recurring revenue and evidence of durable retention.
Investors now want $2.5 million in recurring revenue and evidence of durable retention.
Inside the companies involved, this has been building for months. What changed is that the economics finally became visible from the outside.
Margins are the pressure point. Compute, distribution and support costs all scale with usage, so growth that once looked like leverage now shows up as a line item somebody has to defend quarterly.
Talent is the quiet constraint. The teams able to execute on this are small, well known to each other, and increasingly able to name their price.
For customers, the practical effect is more choice and shorter contracts — a reversal after two years in which incumbents dictated terms.
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Written by
Sophie Alberg
Sophie covers venture financing, late-stage rounds and the investors writing the checks. She joined The Company Wire in 2021 after six years reporting on private markets.
