Fewer Series A Rounds than Million Dollar Lottery Winners

Growing up, I heard the phrase “you’re more likely to get hit by lightning than win the lottery” many times. Both have extremely low odds and are unlikely to happen (as an aside, I know a local real estate developer that’s been hit by lightning twice — talk about crazy low odds). Well, for entrepreneurs looking to raise money, there are fewer Series A rounds per year than people that win $1 million or more in the lottery per year according to well known investor David Hornik:

Entrepreneurs and the media alike love to talk about how much money startups have raised because it’s public and definitive. Well, in reality, 99.9% of startups that try to raise a Series A round fail. Yes, friends and family rounds are common but a Series A round from an institutional investor is actually quite rare.

Entrepreneurs would do well to nail the 8 metrics questions for raising a Series A and focus on the appropriate initial traction for their business. Oh, and remember, that vast majority of successful entrepreneurs never raised a Series A round.

What else? What are some more thoughts on the rarity of raising a Series A round?

2 thoughts on “Fewer Series A Rounds than Million Dollar Lottery Winners

  1. Great post David. While researching about the finer nuances of fundraising, I also learned from a study that VCs spend an average of 3 minutes 44 sec on pitch decks. No wonder it is so hard to capture their attention and interest because they are being inundated with tons of such pitches every day. Despite the barriers of entry being so low nowadays for startups to enter into business, it is still quite a challenge to raise money beyond seed round. Makes me respect the ones that went across to Series A even more. – KP(BICAD)

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