Fundraising readiness criteria In general, readiness criteria | 🦄 Unicorn Mafia Startup

Fundraising readiness criteria

In general, readiness criteria may differ widely between investors. For the same project, one investor may say that it is "too early for seed" and another will be willing to lead the Round A. And yet, there are general patterns. Here's how I see it in simplified terms:

# Seed Round readiness
*1. Team credibility.* The team members have proven skills in key areas of the business. Most frequent requirements: specialized domain knowledge, tech skills, consumer growth, b2b sales.
*2. Demand signal.* Direct information from customers or prospective customers. Possible formats: waitlist, letters of intent, pilot contracts, early revenue. In many cases, the demand signal is acquired before product launch.
*3. Market story.* For large existing markets ($1B+ customer spending, $100M+ revenue current leader), a clever idea on how your new underresourced company will eat away market share from today's leading players. For emerging markets, an upcoming major market change that will create new customer needs and unlock previously impossible solutions.

# Round A readiness
*1. Usage volume.* For B2B companies, recurring revenue approaching or exceeding $1M ARR. For consumer companies, 100k MAU or more.
*2. Solution fit.* Strong retention and engagement for consumer companies, net negative churn and high renewal and referral rates for B2B products.
*3. Scalable distribution model.* Predictable, repeatable, and profitable way to acquire more customers and users.