Securing venture capital or private equity investment can be the tipping point that propels a SaaS company into its next phase of growth. But for founders, especially those deep in product development and go-to-market execution, it can be difficult to know what investors are really looking for—and what separates the fundable from the forgettable.
At Sea Change Advisors, we’ve worked with SaaS founders at every stage of the journey—from seed funding to 9-figure exits. Whether you’re preparing to raise your first round or trying to attract growth equity, understanding investor expectations is critical.
Below, we outline what top-tier investors are evaluating in today’s SaaS landscape—and how to position your company to attract the right capital at the right time.
1. Clear Product-Market Fit (PMF)
Investors want to see that you're solving a real problem for a well-defined audience—and that customers are willing to pay for it.
How to demonstrate it:
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Strong retention metrics (net revenue retention > 100% is gold)
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Growing word-of-mouth adoption or customer referrals
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Case studies that show real business outcomes from your product
If you’re still pre-revenue or early-stage, investor attention will shift to leading indicators: pilot customer enthusiasm, feedback velocity, or letters of intent (LOIs).
2. Predictable and Scalable Revenue
Monthly recurring revenue (MRR) is the backbone of SaaS. Investors look for growth that is recurring, predictable, and ideally expanding.
Key metrics:
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MRR / ARR and growth rate (ideally 15%+ MoM at the seed stage, 50-100%+ YoY growth for later rounds)
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Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV)
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Payback period (under 12 months is ideal)
Investors also want to see scalable go-to-market systems. Ad hoc sales strategies may work early, but repeatable sales motions and refined ICPs are what attract serious capital.
3. Efficient Growth
Gone are the days of "grow at all costs." Today’s investors focus on capital-efficient growth—how quickly and sustainably you can grow with the capital at hand.
Show off your efficiency by tracking:
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Burn multiple (burn rate / net new ARR)
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Rule of 40 (growth rate + profit margin)
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Gross margins (80%+ is standard for high-performing SaaS)
High-growth, low-efficiency companies may still raise—but with more scrutiny and lower valuations.
4. Strong Leadership and Execution
Your team matters. Investors aren’t just betting on your product—they’re betting on you.
They want to see:
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Founders with domain expertise and a clear vision
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A leadership team that can scale with the company
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Evidence of strong decision-making and operational discipline
Having a trusted operating advisor, like Sea Change, involved can give investors confidence in your ability to execute and scale.
5. Differentiated Market Position
Your story must go beyond "we’re a better version of X." Investors want to know: Why now? Why you?
Strengthen your positioning by articulating:
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A compelling origin story tied to a pain point
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A unique go-to-market or product-led growth strategy
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Defensible IP or a network/data advantage
Market timing, regulatory shifts, and AI integration are all areas where investors are currently paying close attention.
6. Clean Cap Table and Investment Readiness
Lastly, smart investors want clean, simple structures. Messy cap tables or unclear ownership can be red flags.
Before raising:
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Get legal documents in order (SAFE notes, equity plans, IP assignments)
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Build a robust data room (metrics, customer decks, financial models)
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Forecast how the capital will be used—and how it will drive ROI
Final Thought: It’s Not Just About Capital—It’s About Fit
VC and PE firms bring more than money—they bring influence, expectations, and (sometimes) control. Make sure their investment thesis aligns with your company vision. Seek partners who bring strategic value: access to customers, hiring support, M&A experience, or operational playbooks.
At Sea Change Advisors, we help SaaS founders align operations, metrics, and narratives to get investor-ready—whether you're raising your first $1M or your next $20M. If you're preparing for a fundraise or looking to scale with intention, let's talk.
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