Why 73% of Series A Attempts Fail (And How to Be in the 27% That Succeed)
By the Cinderwood Team • September 23, 2025 • 8 min read
Introduction
Last quarter, we analyzed 312 Series A attempts from our network. 227 failed to close. That's a 73% failure rate for companies that had already raised seed rounds and achieved some level of product-market fit.
The brutal truth? Most of these failures were preventable.
After helping 20+ companies successfully raise their Series A rounds (including Warmly's $17M and Scalestack's transition to A), we've identified the exact patterns that separate successful raises from the graveyard of broken dreams and extended bridges.
Here's what actually kills Series A rounds—and how to avoid each trap.
The Five Fatal Mistakes
Fatal Mistake #1: Raising on Metrics That Don't Matter Anymore
What worked at Seed: "We have 10,000 signups!"
What Series A needs: "We have $2M ARR growing 15% MoM with 140% net revenue retention"
The bar moved while you were building.
Series A investors don't care about vanity metrics. They care about:
- Gross margin (>70% for SaaS)
- CAC payback period (<18 months)
- Net revenue retention (>100%)
- Growth efficiency (>1.5x)
We watched a founder pitch 50 VCs with "500% user growth." Not one term sheet. Why? Their revenue per user was declining. User growth without revenue growth is a death spiral, not a success story.
The fix: Build your entire narrative around unit economics. If you can't show a clear path to profitable growth, you're not ready for Series A.
Fatal Mistake #2: The Product-Market Fit Delusion
37% of founders we surveyed claimed "strong product-market fit." When pressed for evidence, they cited:
- "Customers love us" (no NPS data)
- "Low churn" (but only 6 months of data)
- "Big pipeline" (of unqualified leads)
Real product-market fit for Series A means:
- Multiple customers expanded 3x+ after initial purchase
- Sales cycles getting shorter, not longer
- Word-of-mouth driving 20%+ of new business
- Win rates above 25% on qualified opportunities
One of our portfolio companies thought they had PMF with 50 customers. Then they discovered 40 were using free trials indefinitely. The 10 paying customers? All from the founder's personal network.
The fix: Survey your customers with one question: "How disappointed would you be if [product] disappeared tomorrow?" If 40%+ say "very disappointed," you have PMF. Anything less, you don't.
Fatal Mistake #3: Running a Sequential, Not Parallel, Process
The average failed Series A ran like this:
- Month 1-2: Talk to 5 "dream" VCs
- Month 3-4: Get rejected, talk to 5 more
- Month 5-6: Desperation sets in, quality drops
- Month 7+: Accept terrible terms or give up
This sequential approach guarantees failure. VCs can smell desperation, and nothing kills leverage faster than time.
The fix: Launch with 50+ simultaneous conversations. Yes, it's overwhelming. That's the point. Competition creates urgency. Urgency drives decisions. Our clients who run parallel processes close 3x faster at 40% higher valuations.
Fatal Mistake #4: Wrong Investors, Wrong Order
A founder recently showed us his target list: Sequoia, a16z, Benchmark, Founders Fund, Accel.
"What's your connection to these firms?" we asked."I'll cold email the partners."
That's not a strategy. It's a fantasy.
The reality of Series A:
- Top 10 firms see 2,000+ deals per year
- They invest in 20-30
- 90% come from warm intros
- 75% from other portfolio founders
Cold outreach to Tier 1 firms isn't brave. It's naive.
The fix: Build three investor tiers:
Tier 3 (Practice): Firms you'd accept but aren't ideal. Pitch these first to refine your story.
Tier 2 (Targets): Firms with thesis fit who've invested in similar companies. This is where deals actually close.
Tier 1 (Dreams): Only approach with warm intros AND competing term sheets for leverage.
Fatal Mistake #5: Founders Doing Founder Things
"I don't need advisors. I raised my seed myself."
Famous last words.
Here's what founder-led Series A processes typically miss:
- Market comps for valuation negotiations
- Parallel process management across 50+ VCs
- Data room optimization for due diligence
- Term sheet negotiation beyond just dilution
- Managing investor psychology and FOMO
We tracked 100 founder-led raises versus 100 professionally-advised raises:
- Founder-led: 23% success rate, 8-month average, 25% average dilution
- Advised: 73% success rate, 3-month average, 18% average dilution
The fix: Get help. Whether it's advisors, other founders, or professionals. The cost of bad advice is high, but the cost of no advice is catastrophic.
The Three Patterns of Success
After analyzing the 27% that succeeded, three patterns emerged:
Pattern 1: The Narrative Trumps Numbers
Every successful Series A tells one of three stories:
The Land Grab: "This market is exploding and we're best positioned to capture it"
The Network Effect: "Every customer makes us more valuable to the next customer"
The Moat Builder: "We're 18 months ahead and the gap is widening"
Numbers support the story. They don't replace it.
Pattern 2: Manufactured FOMO
The best Series A rounds don't happen. They're engineered.
- Week 1-2: 50+ simultaneous first meetings
- Week 3-4: 20+ second meetings
- Week 5-6: 10+ partner meetings
- Week 7-8: 3-5 term sheets
- Week 9-12: Negotiation and close
This compressed timeline isn't natural. It's manufactured. But it works.
Pattern 3: The Power of No
The fastest way to get to yes is being willing to say no.
Companies that closed Series A successfully:
- Walked away from at least one term sheet
- Had a clear "walk away" point defined upfront
- Were genuinely prepared to extend runway versus take bad terms
Your BATNA (Best Alternative to Negotiated Agreement) is your superpower. If you're not willing to walk, you've already lost.
The Uncomfortable Truth
Most Series A failures aren't about the product, market, or team. They're about process.
Bad process kills good companies. We see it every day. Strong businesses with real traction crater because they:
- Started too late
- Targeted wrong
- Negotiated poorly
- Ran out of time
The 27% that succeed aren't necessarily better companies. They run better processes.
Your Series A Playbook
If you're raising Series A in the next 12 months, here's your playbook:
6 months before:
- Get to $100K+ MRR minimum
- Document unit economics religiously
- Build relationships with 20+ VCs (no pitching yet)
3 months before:
- Hire advisors or tap your network
- Create target list of 75+ qualified VCs
- Prepare data room completely
Launch month:
- Send 50+ parallel first meetings
- Iterate pitch based on feedback
- Compress all meetings into 4-week window
Close month:
- Negotiate multiple term sheets simultaneously
- Optimize for terms, not just valuation
- Close fast once you decide
The Bottom Line
73% of Series A attempts fail. But they don't fail randomly. They fail predictably, following the same broken patterns we see over and over.
The difference between the 73% and the 27% isn't luck. It's process, positioning, and professional execution.
You can be in the 27%. But not by doing what everyone else does.
Ready to run a Series A process that actually closes? Let's talk.
Based on analysis of 312 Series A attempts from 2023-2025. Success defined as closing within 6 months at or above target valuation. For detailed methodology, email insights@cinderwood.capital
