Something changed in the diligence calls we’ve sat on over the past quarter. The questions got less about narrative and more about arithmetic — and the founders who could answer in numbers, not adjectives, were the ones who closed.
The questions that used to close a round
Two years ago, “what’s the total addressable market” and “who’s on the team” carried a lot of weight. Those questions haven’t disappeared, but they’ve moved earlier in the process — screening questions, not closing ones. The questions that now sit between a warm meeting and a signed check are blunter: what’s your gross margin, what’s your logo retention, what happens to burn if this round takes eighteen months instead of twelve.
Why the shift happened
Funds that deployed aggressively into growth-at-any-cost narratives in prior cycles are now the ones explaining those marks to their own LPs. That conversation changes what a partner is willing to defend internally — “the team is exceptional and the market is huge” doesn’t survive an investment committee memo the way “72% gross margin and 118% net revenue retention” does.
What this means if you’re raising now
Build the memo an investor would have to defend to their partners, and build it before the meeting, not in response to a data request afterward. If your best answer to “what’s your retention” is a story instead of a number, that’s the gap to close before your next pitch — not during it.
Fundamentals-first fundraising is the whole premise of our advisory practice — happy to pressure-test your numbers before an investor does.
