Charles HudsonFounder and Managing Partner, Precursor Ventures

Navigating a Fickle VC Market: The Reality of Series A Funding

15 Aug 2026 · 1 min

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Charles Hudson says only 20-25% of startups will raise Series A funding now, since investors only back companies that could become $5 billion businesses. Founders have two paths: bet on the volatile VC market, or build profitable growth, revenue-based financing, or strategic investors instead.

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If you don't think you're building a $5 billion company and it's not clear to investors you're building a $5 billion company, the Series A market is probably going to be closed to you. Series A graduation rates are going to come down to 20 to 25%. And even that was probably optimistic. So I think in that world, I talk to a lot of companies and say, you have 2 choices. You can try to read a very fickle VC market, or you can take your destiny into your own hands and you can focus on either profitable growth or or finding capital providers who don't need companies to go from $0 to $100 million in ARR in 18 months.