How to Raise a Series B: Metrics, Multiples, and Process
Series B fundraising: the growth-stage bar ($5M–$15M ARR), revenue multiples in the current market, unit economics investors demand.
How to Raise a Series B: Metrics, Multiples, and Process
Overview
Series B is where fundraising becomes an exercise in public-market-style analysis. Investors evaluate unit economics, cohorts, and retention with real rigor — and price the company off revenue multiples.
This guide covers the growth-stage bar, current revenue multiples, and how to run a Series B without leaving money on the table.
How much to raise
Typical range: $20M–$60M for software
Typical post-money valuation: $150M–$500M
Typical dilution: 15–25%
Common structure: single lead + strategic co-investors + existing pro-rata
The Series B bar
ARR: $5M–$15M for software, sometimes higher.
Growth: 2x+ year over year at scale.
Net revenue retention: 120%+ for top-decile SaaS.
Gross margin: 75%+ for software; category-specific elsewhere.
Clear path to $50M+ ARR within 24 months of the round.
Revenue multiples in the current market
Series B valuations are set primarily by revenue multiples. Multiples compress with growth rate: a company growing 3x commands a much higher multiple than one growing 30%.
In the current market, healthy software B rounds price at 10–20x forward ARR. Frothy categories (AI infra, security) can price higher; slower-growth categories price at 5–8x.
What investors underwrite at Series B
Cohort NRR by segment and vintage.
Sales team productivity — ramp times, quota attainment, rep-level unit economics.
Category ownership — are you the default vendor for a specific ICP?
Path to profitability — investors want a credible story, even if not immediate.
Executive team completeness — CFO, CRO, CTO in place or being recruited.
Meetings: 15–20 partner meetings in a 3-week window.
Diligence: 4–6 weeks. Customer refs, cohort deep-dive, market study, sometimes commercial due diligence.
Term sheet + close: 30–60 days.
Frequently asked questions
What ARR do I need for a Series B?
Most software Series B rounds require $5M–$15M in ARR with strong retention and 2x+ growth. Some categories (AI, infrastructure) price rounds off higher-multiple growth stories; others (services-heavy SaaS) need more revenue.
Should I hire a banker for a Series B?
Not usually. Bankers add most value at Series C+ and secondary transactions. At B, a strong CFO and a disciplined process are typically enough. Founders who hire bankers at B sometimes signal weakness.
What revenue multiple should I expect at Series B?
In the current market, healthy software companies price at 10–20x forward ARR at Series B. Growth rate is the biggest driver — a company doubling year over year gets a higher multiple than one growing 50%.
