Dear SaaStr: What Does “Old-School” Series A Funding Mean? - The Entrepreneurial Way with A.I.


Sunday, February 25, 2024

Dear SaaStr: What Does “Old-School” Series A Funding Mean?


Dear SaaStr: What does “old-school” series A funding mean?

Most likely:

  • trying to buy 15-20%+ of a company,
  • that is reasonably capital-efficient,
  • and has at least product-market fit and some early traction,
  • that hasn’t done endless seed rounds before the Series A,
  • at a post-money valuation of < $30m-$40m

The “traditional” or “old-school” venture business of Series A investments was built on $3-$5m checks that bought material ownership.  Today, call it $6m-$8m with inflation 🙂

This traditional model also rolled up nicely into early-stage VC partners each investing $50m or so over the life of a single fund (e.g., 3 partners x $50m each = $150m fund), because each partner could do 10+ deals, save room for later rounds, and have material ownership in each deal.

The endless seed, YC, AngelList, the explosion of non-professional angels, ramen efficiency, the dramatic increase in valuations, and so many other newer factors have lessened the number of “old-school” Series A deals.  1,000 unicorns make almost every investment style look like it worked.

But to some extent now, they’re back in fashion.


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Jason Lemkin, Khareem Sudlow