Think $1M ARR Means You’ve Achieved Product-Market Fit? Think Again.
– from https://smmry.com/
"Series A is the product-market fit round. $1M in ARR is the magical number that equals product-market fit. Therefore, I need to hit $1M ARR to raise my Series A.".
Here why $1M in ARR means very little to me as an investor, and the frameworks that I personally use to assess product-market fit at the Series A. Revenue growth doesn't tell the full story.
Ultimately, product-market fit means a group of people have the same problem, and your product solves it.
For most product markets, consistency of feedback between customers can be a great North Star for validating product-market fit.
For founders who believe they have found product-market fit and are raising a Series A, expect VCs to call your customers and pitch prospective customers to assess product-market fit.
Try to think outside the box when looking for patterns in why certain customers love your product and others don't.
If you're fundraising, share those patterns with prospective investors so that they don't misjudge product-market fit by pitching your product to someone too far outside your ICP.