From Series A to IPO: The Everest Every Hot Startup Has Climbed

Heres the TLDR on typical SaaS startups 🌱


Stage


Series A: Gain your cult following

Reality in 2025: $7-15 M at ~$35-75 M post evaluation with a 20-30% dilution.

Series B: Scale, scale, scale

Reality in 2025: $7-15 M at ~$35-75 M post evaluation with a 20-30% dilution.

Pre-IPO late rounds: Polish & de-risk

Reality in 2025: $25.4 M in Europe while U.S. clears $50-100 M.

IPO: You're liquid, do you like the spotlight?

Reddit (2024) raised $748 M at a $6.4 B float; Figma (filed July 2025) aims to beat $12.5 B.

1. Why Does the Alphabet Start at A? 🔤

Most startups begin with pre-seed, angel, and seed money ~often through SAFEs or convertible notes~ to build a demo that won’t crash on launch day. Series A is the first priced equity round with a professional term sheet, a board seat, and full-blown due diligence.

Q. Am I pre-seed or Series A?

A. If you’re still iterating on basic features, it’s seed season, get back to VS code and keep grinding. You are not read for Series A.


2. Series A - Proof, Not Promises 🧐

This is where things get real. Venture capitalists want proof that strangers (not just your mom, dad, and hackathon buddies) will pay for your product. Validate your product-market fit at real, even if it's still small in scale. Last year, European founders hauled in investments that averaged $10.6M. The "North-star" metrics investors look for are: Early ARR ($1.5 M+ for SaaS), insane retention, or viral consumer growth.

Founder Note: Keep your LTV:CAC comfortably above 3 to prove every marketing dollar counts. Replace side-hustle bookkeeping with a real finance stack and an investor-ready data room. Shore up your leadership bench. Series A boards almost always expect a proven VP of Engineering or Product in place.


3. Series B - Scale Like You Mean It 📈

Flip the switch from “can we?” to “how fast?”

You've successfully proved that people like your product. Now you need to show you can scale the product as fast as possible, without letting the finances blow up. The average European B-round is currently raising about $25.4 M, a stark contrast to US-based startups in AI and life-sciences who are frequently blow past $50 M. Together AI’s $305 M Series B at a $3.3 billion valuation is a loud and recent example. By now investors expect $5–10 M ARR (or the consumer-growth equivalent), 2-3x year-over-year expansion, and a professionalized exec bench.

Check-writers: Growth-stage VCs + cross-over funds (think Coatue, Tiger, SoftBank).

Dilution: 15-25 %, but B investors often demand senior preferred rights and stricter board control.

Founder Note: Mis-forecasting "burn" money between series A and B forces brutal "bridge" rounds, therefore protect your "runaway" funds at all costs.


4. Late-Stage & Mezzanine - The Valuation Olympics 🏋🏽‍♀️

IPO or die trying.

Rounds C, D, and beyond fund optionality: geographic expansion, acquisitions, cap-ex (AI chips, anybody?), and balance-sheet window-dressing before ringing the bell.

Late-stage capital aims to de-risk scale and polish the balance sheet before Wall Street takes a look. Because the new money comes in at a sky-high price and with senior rights, it can scale-down earlier valuations, dilute early holders, and recast the company’s story around the fresh investors. Databricks (my poster child) pulled in more than $500 M during Series I at a $43 billion valuation. This attracted crossover titans like Fidelity and T. Rowe Price, sovereign-wealth pools, public-market mutual funds, and strategic corporates like NVIDIA. This calibre of investor often demands stricter terms including senior liquidation preferences, full ratchets tied to IPO pricing, and quarterly GAAP audits.


5. The IPO - Is this really the end? 🏆

Eventually (if everything goes according to plan) your company will finally try to tap into the public markets. When a company lists, it gains three things: immediate liquidity for early investors and employees; a liquid stock currency for acquisitions and high-level talent; and a credibility boost with enterprise customers who prefer partners they can analyze on a Bloomberg terminal. Reddit’s March 2024 IPO broke a two-year tech-listing drought: even with investors skittish over rising rates and volatile markets, the company raised $748 million at a $6.4 billion valuation, proving that a strong narrative can still pry the window open. Figma is now attempting something similar. After regulators blocked Adobe’s $20 billion takeover, the design-software firm filed in early July, aiming to persuade Wall Street that it still merits the $12.5 billion valuation set in a 2024 secondary sale. This goes to show that market windows swing fast so take your chance.


Key Takeaways for Founders & Operators ✨

1. Milestones, not time, trigger rounds. Hitting $1-2 M ARR fast trumps dragging feet for 18 months.

2. Every new check rewrites governance. Guard board composition early.

3. Margins matter more than momentum. If each sale barely leaves any profit, investors will carve tougher terms into the deal.

4. Pay-me-first clauses stack up late-stage. Read that liquidation preference twice - then again - then one more time... maybe this time over coffee.

5. IPO ≠ finish line. It’s a liquidity event and the start of quarterly-earnings hell.