AI Boom Shifts Series A Landscape: Focus on Problem Solving,Conviction & Distribution
If you’re building an early-stage startup adn trying to raise venture capital dollars to fuel your big ideas – focus on solving a specific problem,make sure you have strong conviction,and think hard about distribution in the age of AI.
Those were some tips shared during a recent Seattle AI Week panel discussion with Kellan Carter, founding general partner at Bellevue, Wash.-based firm fuse, and Rohan D’Souza, CEO and co-founder at Seattle-based healthcare benefits startup Avante.
The pair know each other well. fuse led Avante’s $10 million seed round in late 2023, before the company was generating meaningful revenue.
Carter initially met D’Souza several years earlier.”There’s so much trust that had been built,” Carter said, reflecting the importance of relationship-building between founders and VCs.
The panel discussion, hosted by Seattle VC firm Ascend, was titled “The New Series A Landscape” – a nod to shifting expectations in the AI boom.
The median Series A round in Q1 of this year was $7.9 million, according to Carta.But there were also nine companies that raised more than $200 million for their series A rounds in Q3, according to CB Insights.
“The variance for Series A is wider than ever,” Carter said.
For those companies raising massive Series A rounds, Carter said it’s about “unfair insight” that creates conviction and opens doors to capital.
“The insight is so clear it’s getting investors excited to cut that big of a check – because the prize is so big right now,” Carter said.
Venture funding has increased to a 3-year high, largely thanks to AI, which accounted for 51% of all funding and 22% of deals in Q3, CB Insights reported.
Carter joked that AI is “always in the pitch now – even if it’s not AI.” for Fuse, assessing a pitch is about deter
Avante CEO on Securing Series A Funding, Competition, and Transparency with Investors
avante, a software company focused on streamlining HR governance and reducing benefits program costs, officially launched earlier this year. CEO Rohan D’Souza shared insights on navigating the Series A funding process, competitive landscape, and the importance of transparency with investors.
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Avante CEO Rohan D’Souza. (LinkedIn Photo)
D’Souza explained that raising a Series A round isn’t solely about immediate financial needs; it also serves as a signal to potential enterprise clients.Some larger companies may hesitate to partner with early-stage startups, notably those based outside of major tech hubs. A stronger balance sheet can alleviate concerns about the company’s long-term viability. “There’s a little bit of that perception of, what will happen if these guys go away?” D’Souza stated. “So as a founder, I’m like, OK, should we really aggressively start to pursue more money on the balance sheet? To send a clear message out that, we’ve got a lot more gas in the tank, even though we didn’t necessarily need it.”
When considering competition,D’Souza advises founders to focus on established industry players rather than other startups. he emphasizes understanding how incumbents are evolving their offerings and accelerating innovation. “What are they doing to unlock a feature set? And how do you get there much faster?” he said.
Carter, another founder, highlighted the risk of competing with tech giants like Microsoft, Amazon, OpenAI, and Anthropic. He noted that entering a market where these companies might release competing products – potentially offered for free or as part of a larger bundle – presents a important challenge.
D’Souza, who previously served as product chief at healthcare automation company olive AI, underscored the importance of open communication with investors. He stressed the need to be upfront about timelines, even if it means acknowledging delays in product development. “Be very clear about your timelines,” he said. “If you need three months or six months to really build out the core of your product, be extremely obvious about it.”
Avante employed a purposeful strategy in 2024, foregoing recurring revenue and rather running a paid early adopter program. This approach created a sense of scarcity and “fear of missing out” (FOMO) before the company’s official launch in April 2025, successfully converting pilot programs into multi-year contracts.
D’Souza offered a key piece of advice for fellow founders: “focus on the one core thing that you do 100X better.”