For first-time founders, raising the first round can be the messiest phase of building. Advice is plentiful, but often contradictory, and it’s hard to separate the signal from the noise. At Pear, we often invest when there’s no product, no customer, and no revenue. So how do we decide who gets backed?
In November 2025, I delivered a keynote at Slush called “Raising Your First Round,” and I’m sharing the key insights here: how early-stage investors decide based on the founding team, market opportunity, storytelling, and traction.
The classic trifecta (almost)
We’ve all heard the shorthand: “Market, team, traction.” The framework is valid, but there’s some nuance that many founders miss. For early-stage investors like myself, traction matters the most — but it looks different at every stage.
- Pre-seed – Traction is about validating the idea, not scaling it
- Seed – Traction is about product love, not growth at all costs
- Series A – Traction becomes about revenue quality and repeatability
In the pre-seed stage, metrics don’t matter as much. If you can bring data to the table that shows you’re building something customers actually want, that’s stronger than anything. Then, the market and your team amplify that by showing your potential to execute.
The best meetings are the ones where I leave feeling excited, saying to my partners, ‘This company has to exist. It’s inevitable, so we’d better get behind it.’
At the seed round, the bar moves (but not in a way you might expect). What matters most is love, not scale. You want a few customers who love your product, who wake up thinking about it. This is more important than having millions of people who like your product but aren’t ambassadors for it.
Why “huge market” slides miss the mark
When it comes to market size, many founders ask, “How big is big enough?” For me, throwing “$2B TAM” on a slide won’t cut it.
The most important things I look for are: methodology (how you size the market) and size (how big the market is).
First, methodology matters. I often see decks with top-down market calculations and industry numbers calculated by research and consulting firms. Top-down market sizing can be directionally useful when analyzing the growth of a particular industry, but on it’s own, it doesn’t tell me much about your business.
A bottom-up approach can be much more compelling. Show me the number of customers x revenue per customer. This tells me a lot more about how you’re thinking about your business, that you’re clear on your ICP, and that you have a long-term plan to capture customers and scale.
Pitching is more than putting numbers together in a deck. It’s your opportunity to show that you’re obsessed with your customer, the problem, and the path to winning.
Second, market size matters—but in context. After all, an enterprise company with $100K Annual Contract Values (ACVs) needs a very different go-to-market motion than an SMB or consumer product.. We want to see big markets, but from a bottom-up approach.
On the investor side, always assume we’re thinking about practicalities. Seed funds need big outcomes to produce returns. That doesn’t mean you need to show a $40B market on day one, but you should be able to explain how you plan on expanding either horizontally (more customers) or vertically (more value per customer). Remember: It’s not about how big the market is on its own; it’s how you’re going to build value within that market.
How investors actually evaluate teams
A big founder myth is that “one great pitch wins the round.” In reality, early-stage investors rarely decide based on a single interaction. It takes time to prove that you’re the best person to solve the problem. Every touchpoint is an opportunity to share new information, achievements, and momentum.
At Pear, we use a three-axis framework to evaluate teams:
- Execution – Can the team build, sell, and hire?
- Market and customer knowledge – Have you lived the problem, or talked to hundreds who have? Do you know what your competitors are doing?
- Character – Are we seeing integrity, obsession, and self-awareness?
Founder dynamics matter, too. How co-founders interact — who talks, who defers, who interrupts — can reveal a lot more than what’s in the pitch deck.
Capital doesn’t give you direction; it amplifies the direction you already have. So be clear on why now, why this, and why you.
Overall, there’s no “right” profile. We’ve backed companies with seasoned co-founders adept at market and execution, and we’ve also backed founders who are relatively inexperienced but rank off the charts in character. It all comes down to who’s right for the problem, market, and moment.
The best founders are great storytellers
Aristotle said that the best communicators have three traits in common:
- Ethos – Your character, how you establish credibility
- Pathos – Sharing your passion and sense of purpose
- Logos – Having the data to back up what you’re saying
The best pitches bring all these things together into a compelling story. Pitching is more than putting numbers in a deck — it’s your opportunity to show that you’re obsessed with your customer, the problem, and the path to winning.
Here’s the catch: Founders sometimes see up to 10 companies a day, so be clear and on message. Try to keep it under 20 minutes. But if someone interrupts to ask a question, take the time to answer. It’s a sign that they’re interested.
The best meetings are the ones where I leave feeling excited, saying to my partners, “This company has to exist. It’s inevitable, so we’d better get behind it.”
Back your story up with a solid grasp of process
Don’t just know how much you want to raise, know why you’re raising. Capital doesn’t give you direction; it amplifies the direction you already have. So be clear on why now, why this, and why you.
You should also have thought through your next big milestone post-seed round and how you plan to achieve that growth. Be thinking about how much capital you need to get to 1.5x revenue for your Series A.
Finally, be patient and leverage your network. Sometimes rounds close in a month or two, but you’re better off being prepared for three to six months. Consider stack-ranking your meetings, and don’t be shy about giving updates to different firms to create a sense of urgency — but always be truthful. The VC community is small.
One believer is enough to start
The funding game has changed, with AI raising the stakes — companies are building and growing faster than ever before. But one thing hasn’t changed: The best companies start with a single believer.
You could be one of them. Stay passionate. Stay close to the problem. Stay obsessed with your customer. Build momentum one step at a time, and capital will follow.