You’ve got millions in revenue. You’re growing. Raising money should be easy, right? Think again. 

Lately I’m seeing many companies in the same boat. I call them the “Pretty Good Startups.”

They’ve gotten to a few million dollars a year in revenue. They’re growing steadily at around 2x year over year. 

Cash is running low and it’s time to raise a new round. 

A couple of years ago, this wouldn’t have been a problem. But today, expectations are way up. 

The best AI companies are reaching hundreds of millions of revenue at record speed.

Take Lovable, the vibecoding tool. Lovable reached $200 million ARR in just one year.

At that point, your SaaS company that went from $3 million to $6 million last year just doesn’t interest investors. 

They’d rather place a bet on a new startup that could be the next Lovable. Or, they can dump more money into their fastest growing company. 

Either way, you’re not getting a check. So what do you do? 

The key is to get to profitability. Then, you don’t need VC’s.

If you’ve got a profitable business doing $5 million a year and you own half of it as the founder, you’re in a great position! 

You can continue with that steady growth. Or, you can ship a bunch of new AI features and try to grow faster. Either way, you’re not going anywhere. 

But if you require regular cash infusions, you’re in serious trouble. 

We can beat up on VCs for having ridiculous expectations. But their job is to look for the best investments.

Two years ago, doubling year over year was best in class. Not anymore. 

There will be no blog on Monday for President’s Day. Have a great weekend!

More on tech: 

Wren: The AI Coach for Lonely Founders

Your Deck Probably Sucks. Here’s How to Fix It.

Why You Must Be Full Time to Raise Venture Capital

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