If you’re a startup founder eyeing a Series C round, here’s the hard truth: capital is out there, but getting it feels tougher than ever.
At TechCrunch’s All Stage conference this July, Cathy Gao, a partner at Sapphire Ventures, shared exactly why raising a Series C in 2025 isn’t for the faint of heart—and what founders need to get it right.
Let’s break it down.
Only a Few Make It This Far
Getting to Series C is no small feat. In fact, according to Gao, only 1 in 5 startups that raise a Series A ever make it to this level.
And lately, the bar has only gone higher.
Investors aren’t just paying attention to growth anymore. They’re looking for certainty—something harder to find in today’s market. Gao put it plainly: the real question isn’t, “Is this company growing?” It’s, “Is this company on an undeniable path to become a market leader?”
What Investors Want to See
If you want to secure that Series C, you need to be more than a fast-growing startup. You need to show investors that you own the space you’re in. Gao said Series C companies usually share these traits:
- They’re already leading or defining their category
- Their go-to-market motion is working
- They’re growing efficiently with real traction to back it up
But here’s the kicker: even strong metrics won’t be enough if investors can’t see your long-term potential. “Metrics don’t always turn into money,” Gao said. Storytelling matters just as much as spreadsheets.
She gave an example of a company that locked in a $2 billion valuation—even without blowout metrics—simply because they told a compelling, believable story about becoming a category leader.
Growth Is Good—But Only if It Lasts
We’re living in the AI age, and some companies are growing faster than ever. But Gao warned that fast growth can be a double-edged sword.
“Sometimes, what goes up also sharply comes down,” she said. That’s why investors are asking: is the growth sustainable?
One thing they’re watching for is something called a “compounding loop.” In other words:
- Does your product get better with each new user?
- Does your customer acquisition cost (CAC) go down as you scale?
If the answer is yes, investors are more likely to lean in. If not, that flashy growth might not get you very far.
Build Investor Relationships Early
Another piece of advice that stuck with me: fundraising isn’t just about pitching—it’s about planning. Gao compared fundraising to a go-to-market strategy. You don’t just show up one day and expect success. You prepare.
Her firm, Sapphire Ventures, likes to invest at the Series B stage. But by then, they’ve often been following a company for over a year. That means at Series A, even if you’re not actively raising, you should be actively building relationships with potential investors.
Here’s how she suggests doing it:
- Build a lightweight investor CRM (nothing fancy—a spreadsheet works)
- Track who you’ve met, what they care about, and what they’ve invested in
- Create a short distribution list and send out updates regularly
This keeps investors in the loop. It also helps them build a case internally for why you’re worth backing.
Don’t Start Raising Without a Signal
Gao’s final piece of advice? Don’t time the market wrong.
Don’t just pitch 50 firms and hope for a bite. Wait until you’ve gotten signal—actual interest—from multiple investors before formally starting your Series C raise.
Because at this stage, timing means everything.
“It’s not about luck,” Gao said. “It’s really about timing and planning ahead.”
If you’re gearing up for Series C, these takeaways could be the edge you need. Focus not just on your numbers, but on your story. Show investors why you’re the winner in your space—and make sure they see it coming a mile away.
Want a front-row seat to more advice like this? TechCrunch Disrupt 2025 is happening October 27–29 in San Francisco, featuring leaders from Netflix, ElevenLabs, Sequoia Capital, and more. It might be worth the trip.
Keywords: Series C, startup, capital, investors, growth, market leader, sustainability, fundraising, investor relationships
