What Revenue Do You Actually Need for Series A

"Turned down a founder with $1.5M ARR this year and $5M ARR next year. Today, brutal as it is, that isn't good enough to raise a Series A."

Always provocative from Harry and this one drew enough criticism that he actually deleted it. Honestly I'm not sure why he did.

In the simple graphic below, you're trying to find blue dots (the startups that will return your fund by themselves). You're competing with the other funds to do so. There are very few blue dot startups.

You run across red dots slightly more often (startups that are really exciting but then don't pan out). In fact, the red and blue dot startups may look identical when you meet them OR the blue dots actually look worse than the red ones in revenue, team, etc.

If all year you've been meeting dots, and going from $1.5M --> $5M is something you've seen already a number of times, it's not crazy to decline to invest in the next startup you see following the same path.

Now, maybe you object to the idea that just because Harry won't invest means that this startup isn't "good enough" to raise a Series A. Fair play, I get it.

But if I'm another fund who believes that fully, I'm celebrating Harry's approach - more companies for me that that headline investors ignore.

Sometimes blue dots are out in the wilderness with no one investing and sometimes they have 3 term sheets from the top funds already.

Venture is still all about finding the blue dots.