The street to Collection A has by no means been straightforward—however in 2025, it’s steeper, quicker, and much much less forgiving than earlier than. For founders planning their subsequent funding milestone, it’s not sufficient to point out early traction anymore. You’re being benchmarked—pretty or not—in opposition to the lightning tempo of generative AI startups.
A month in the past I wrote on VC Cafe about ‘Constructing an organization within the Age of AI: what’s modified and what stayed the identical‘ sharing the grim sequence A commencement from Carta: Solely 15.5% of corporations that raised a seed spherical in Q1 2023 have raised sequence A in 2025. Consequently, the milestones for sequence A and the size of time that it takes most corporations to achieve these milestones, have gone up.
Based on current benchmarks from Andreessen Horowitz, beneath are the brand new income benchmarks for GenAI entereprise startups.
And the numbers don’t lie. The median GenAI firm:
- Reached $2.1 million ARR
- Raised $4 million in pre-Collection A capital
- Bought from Seed to Collection A in simply 9 months
By comparability, the pre-GenAI gold commonplace for prime enterprise SaaS was:
- $1 million ARR
- In 12–18 months
- Usually with ~$3–5 million in seed funding
GenAI has reshaped investor expectations throughout all classes. Founders constructing in vertical SaaS, marketplaces, shopper apps, and even {hardware} at the moment are held to the identical aggressive timelines, no matter whether or not they’re constructing on massive language fashions.
What This Means for Founders
Even in case you’re not in AI, you’re competing with startups that are. Meaning the Collection A crunch isn’t nearly valuation compression or fewer offers being finished. It’s concerning the compression of time-to-product-market-fit (PMF) and velocity of execution.
Beneath are some concrete takeaways for GenAI founders:
1. Pace to Income Is the New Moat
Traders are on the lookout for startups that may present repeatable, scalable buyer acquisition — quick. Attending to $1M+ ARR in a 12 months was a stretch purpose. Now it’s the minimal bar for top-quartile corporations.
2. GTM Should Be Ruthlessly Centered
The times of imprecise GTM plans and “test-and-see” methods are over. Founders want a crystal-clear roadmap to income:
- Who’re your prime ICPs?
- What’s your CAC payback window?
- What number of leads do you want per thirty days?
- Are you closing offers in 30–60 days?
3. Optionality is Out, Focus is In
Making an attempt to be every part to everybody, or leaving the product too open-ended, typically results in sluggish traction. Submit-seed, readability of imaginative and prescient and tight execution beat flexibility. It’s higher to win one area of interest market than dabble in 5.
Stress-Check Your Go-to-Market
At Remagine Ventures, we advise founders to use a structured GTM dash mannequin—particularly within the Seed to Collection A part:
- Begin slender: Choose a single vertical and geography the place your downside is acute and budgets exist now.
- Plan aggressively: Map out the leads you want month-to-month to hit $1–2M ARR. The place are they in your pipeline? How lengthy is your gross sales cycle?
- Overview weekly: Discover an exterior advisor or investor to evaluation GTM metrics and blockers recurrently. Pace of iteration is essential.
- Minimize lifeless weight: Cease chasing pilots, verticals, or leads that received’t convert within the subsequent 3 months. Deal with income as we speak, not optionality tomorrow.
Ask Your self the $2M ARR Query
In case you needed to get to $2M in ARR within the subsequent 9 months, what would you modify about your technique proper now?
Would you:
- Slender your ICP?
- Improve pricing?
- Redesign your onboarding or paywall?
- Change your gross sales course of?
- Kill slow-moving options or experiments?
In case you’re undecided you may get there—or don’t consider you’ll—it may be time to rethink not simply GTM, however product focus or fundraising technique completely.
What If You’re Not There But?
In case your present trajectory doesn’t get you near Collection A benchmarks, that’s okay—but it surely’s a sign.
Chances are you’ll must:
- Modify your runway expectations (18–24 months is good now)
- Discover bridge financing or revenue-based funding
- Shift from hypergrowth to sustainable development mode
- Or, in some instances, contemplate that Collection A will not be the following milestone, and goal for acquisition or profitability as a substitute. I lately noticed a stat that when analysed, about 50% of seed funding rounds had been extensions… contemplate your runway expectations and the milestones you might want to obtain whenever you begin your fundraising jorney.
Particularly for Israeli startups, I personally consider that it’s extra vital than ever to ascertain presence within the US market faster. That might imply establishing a business base within the US or for the CEO to relocate. Whereas a number of Israeli startups managed to scale from Israel in the course of the Covid years (Monday.com and eToro come to thoughts), it’s an exception, not the rule. New York and San Francisco are each good choices with their very own professionals and cons.
The Collection A crunch is actual—but it surely’s not the tip of the street. One of the best founders see it as a forcing operate to focus tougher, transfer quicker, and construct higher.
The opposite takeaway for me is that the pre-seed spherical has grow to be much more vital in
I am a former common associate at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first bodily hub for startups.
I am additionally the founding father of Techbikers, a non-profit bringing collectively the startup ecosystem on biking challenges in assist of Room to Learn. Since inception in 2012 we have constructed 11 colleges and 50 libraries within the growing world.
