Introduction

VC money shifted to AI rockets, not steady SaaS. Here is how funding works in 2025 and what founders must change now.

What's the problem it solves?

Most founders still pitch like it is 2022. This summary shows what VCs fund in 2025, the new growth bars, and how to plan so you do not run out of cash.

Quick Summary

VCs are chasing AI-native startups that grow at insane speed. Some go from 1M to 100M ARR in 8-11 quarters. That pace has reset the whole market. Solid B2B SaaS growing 60-80 percent at 10-30M ARR used to be fundable. Now many of those rounds get a pass because capital crowds into faster AI bets.

Investors split deals into two buckets. Supernovas are AI-first teams that can hit 40M in year one and 125M in year two, often with weak margins but very high revenue per employee. Shooting Stars are the best classic software companies, still strong, but judged against higher bars. Top quartile metrics are now the minimum bar. If you are below them, you need to show clear acceleration for 3-4 months or plan to run on your own cash.

Founders must be honest about odds, stop assuming the next round is coming, and become number one at something that can be proven with data. Private markets want hypergrowth. Public markets reward steady profits. Do not confuse the two when you set plans, burn, or valuation hopes.

Key Takeaways

• AI-native growth reset VC expectations across all B2B
• Top quartile is now the floor to get a serious look
• 3 great months of clear acceleration can flip no to yes
• Revenue per employee matters more as teams stay lean
• Do not burn on hope. Run on the cash you have unless odds to raise are 70 percent or higher

What to do

• Grade your odds: ask current investors for a percent score and use an objective deck grader to benchmark against 2025 cohorts
• Map yourself to the new bars: compare your ARR band to these targets and write the gap plainly
  • 10-25M ARR: 170 percent growth, 130 percent NRR, payback 1.0x, 160K revenue per employee
  • 25-50M ARR: 100 percent growth, 125 percent NRR, payback 1.2x, 180K revenue per employee
  • 50-100M ARR: 90 percent growth, 120 percent NRR, payback 1.5x, 220K revenue per employee
• Plan a 90-120 day sprint to show acceleration: pick the inflection point, ship, and drive 3-4 straight 10 percent MoM growth prints
• Define your number one: state the narrow category where you win today and prove it with a simple metric customers care about
• Cut or delay hires that do not move the 3 month sprint metrics: focus on product, distribution, and deals that land or expand now
• Extend runway: model a no new money plan. If odds to raise are under 60 percent, run the business to cash flow safety
• Choose the right buyer type: target AI-leaning VCs if you are AI-native. Target the minority of classic SaaS VCs if you are not
• Treat PE offers as different from VC: understand they are partial buyouts, not growth rounds
• Ignore dated playbooks: use advice from people deploying checks in 2025, not from 2021 leaders with large teams and old cost models

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