SaaStr · 2022-06-05
· 1459d
Gap Funding is Critical in SaaS: Why Party Rounds May Fail When You Need Them Most
Jason Lemkin reflects on raising $500K in bridge funding between Series A and B at EchoSign, arguing this was his most valuable capital despite raising $40M+ across four startups. He cautions that trendy party rounds with multiple small investors lack a lead committed to gap funding, which is essential in SaaS where growth compounds predictably but unevenly.
Metrics in this report
Equity Return Multiple on Founder Deferred Salary
10xmultiple
exact
Final outcome of founder salary deferral investment
Runway from Series A Funding
18 monthsmonths
estimated
With aggressive team and spending approach
Series A Funding Amount
$2.5M$
exact
EchoSign/Adobe Sign Series A
Series B Funding Amount
$6M$
exact
EchoSign Series B round
Series B Gap Funding Amount
$500K$
exact
Critical bridge round 14 months post-launch
Series B Offers Received
3count
exact
Competitive offers received in one week
Total VC Capital Raised Across 4 Startups
$40M+$
cumulative
Jason Lemkin's founder experience
VCs Pitched
110+count
minimum
Across all four startups, primarily for tough Series C