- Published on
Learn what VCs actually want, from a founder who’s raised $1B
- Authors
- Name
- DeepHorus
Sasha Orloff, founder and CEO of Puzzle and a Startup Battlefield alum, has raised over $1 billion across multiple companies. In a recent episode of the Build Mode podcast, he shared critical insights on what venture capitalists truly seek from founders. His core message is that investors prioritize founders who deeply understand their business's financial reality, not just its vision.
Orloff emphasized that messy data, misunderstood metrics, or delaying fundraising until cash is critically low can severely cost founders. These missteps can destroy leverage, reduce valuations, and even cause investors to walk away from a deal. He recounted a personal anecdote where he nearly lost a term sheet because his data room was not properly prepared for due diligence.
The discussion covered essential financial metrics every founder must know by heart before pitching. These include revenue growth, the quality of that revenue, runway, margins, and sales efficiency. Orloff explained that investor expectations evolve significantly from pre-seed and seed stages through Series A, B, and beyond, with a growing focus on profitability.
A key takeaway is that VCs do not expect perfection. Instead, they expect honesty and a clear grasp of what is and isn't working within the business. Being transparent about challenges during a pitch can actually build stronger confidence and credibility with investors.
Financial organization and compliance are not just administrative tasks; they directly influence investor confidence and startup valuations. A disorganized data room can signal operational weakness, while a clean one demonstrates preparedness and respect for the investor's process.
Orloff's own frustrations with fundraising and financial management ultimately inspired him to build Puzzle. The AI-powered accounting platform is designed to help startups gain real-time clarity on their financial health, addressing a common pain point he experienced firsthand.
Looking ahead, Orloff suggests that AI could fundamentally change how startups manage accounting. By automating complex tasks and providing clearer insights, such tools may empower founders to raise with greater confidence and leverage, turning financial data from a hurdle into a strategic asset.
