Learn What VCs Actually Want From a Founder Who’s Raised $1B | Build Mode
- Aisha Washington
- 2 hours ago
- 7 min read
Startup fundraising is often presented as a contest of vision, charisma, and momentum. In this Build Mode conversation, however, Puzzle founder and CEO Sasha Orloff argues that investors are also looking for something less glamorous: evidence that a founder understands the company as it actually exists. That includes its problems, financial condition, resource constraints, and path toward durable growth.
Orloff brings an unusually broad perspective to the subject. He has built multiple fintech companies that collectively raised more than $1 billion, and his experience scaling businesses such as Blend and Mission Lane eventually led him to create Puzzle, an AI-native accounting platform. His central message is straightforward: financial fluency is not merely a compliance task. It is a tool for making better decisions, negotiating from a stronger position, and earning trust from investors.
Financial Reality Is a Founder’s Competitive Advantage
Social media can make company building look like an uninterrupted sequence of product launches, customer wins, and funding announcements. Orloff describes a much messier reality. A startup can have its best and worst moments on the same day, while problems in sales, technology, hiring, retention, and cash management compete for attention.
Investors know this. According to Orloff, they do not expect a company to be flawless. In fact, a founder who insists that everything is working may create more suspicion than confidence. What investors want is a leader who can clearly identify what is performing well, what has missed expectations, and what the team is doing next.
That requires what Orloff calls a strong relationship with reality. Accounting supplies one important part of that reality because it translates activity into a consistent picture of revenue, margins, spending, cash, and runway. Founders with timely financial information can direct people, time, and capital toward the areas with the greatest potential impact. Those relying on stale reports or a bank balance are making consequential choices with only part of the picture.
How Puzzle Emerged From a Persistent Problem
Orloff’s first company went through Y Combinator and became one of the fastest businesses to reach $100 million in revenue. As he helped scale multiple fintech ventures, increasingly complex corporate structures followed. Holding companies, separate entities, asset protection, and eventual spinouts or sales all added layers of financial administration.
After stepping back to consider his next move, Orloff discussed his experience with General Catalyst’s Hemant Taneja. One frustration stood out: even while running fast-growing companies, it had been surprisingly difficult to obtain a current, intelligible view of their financial health. Taneja had encountered a related problem through Stripe, where founders could process payments at enormous scale yet still struggle to understand the underlying economics of their businesses.
The gap was especially striking because the startup finance stack had modernized almost everywhere else. Products such as Mercury, Brex, Ramp, Gusto, and Rippling improved banking, cards, expenses, payroll, and employee administration, but much of that data still flowed into accounting systems designed decades earlier.
Orloff saw this as a version of “schlep blindness,” Paul Graham’s term for an unpleasant problem that remains overlooked precisely because solving it appears so burdensome. Puzzle was created to make startup accounting more immediate, connected, and useful for operating decisions—not simply for taxes or due diligence months later.
What Investors Examine at Each Funding Stage
The investor’s lens changes as a company develops. Orloff explains that pre-seed and seed decisions tend to depend heavily on the founders, the team, and the scale of the vision. At that point, detailed performance metrics may not exist.
As institutional capital enters the picture, evidence becomes more important. Investors want to see that a product has been built and that customers will pay for it. Once revenue appears, the discussion expands to cash burn and runway: how much time remains before the company needs more capital?
By Series A and Series B, growth alone is insufficient. Investors increasingly examine the quality of that growth. Revenue is more valuable when it is likely to persist, renew, or expand. A company that adds customers rapidly but loses them just as quickly is fundamentally different from one whose customer relationships strengthen over time.
Efficiency also moves to the foreground. Depending on the business model, investors may consider sales efficiency, customer acquisition cost, payback periods, lifetime value, and gross margin. Orloff notes that many sustainable software businesses aim for gross margins around 70% to 80%. Rapid expansion cannot rescue a model that loses too much money on every unit sold.
Exceptional winner-take-all markets may persuade investors to subsidize losses for longer, as happened with companies such as Uber. Most startups cannot assume that treatment. They must reconcile their growth ambitions with the possibility that capital becomes expensive or unavailable.
Runway Determines Fundraising Leverage
A founder who begins fundraising shortly before the company runs out of cash negotiates from a weak position. Investors can see the urgency, and the founder has fewer alternatives if a deal slows down or falls apart.
Early-stage companies rarely possess much conventional leverage. Orloff says they often create it through fast growth and investor fear of missing out. Accurate runway information helps founders choose when to approach the market, rather than allowing a cash emergency to choose for them.
Financial stress also affects operating performance. It is difficult to concentrate on customers and product development while wondering whether payroll can be met. Fundraising itself consumes time that would otherwise go toward selling and building, potentially weakening the numbers during the very process meant to finance the company.
Regular financial review cannot eliminate those pressures, but it can expose them sooner. Modern systems can combine account and transaction data to estimate cash, burn, and runway, then notify a founder when those figures change materially. Orloff’s broader point is not that instinct should disappear. Founder intuition remains valuable, but it should operate alongside reliable evidence.
Compliance Is a Test of Trust
Basic financial hygiene can decide whether a promising investment proceeds. Orloff says investors frequently walk away from companies they otherwise like because elementary compliance requirements have not been met. Missing records or unexplained inconsistencies prompt a wider question: if the founder neglected this obligation, what else might have been overlooked?
The same problem can derail acquisitions or reduce valuations. A buyer cannot confidently price a company if its revenue, obligations, ownership, or expenses cannot be verified. Financial disorder introduces risk, and risk is usually reflected in either stricter terms or a lower offer.
A fundraising data room should therefore be ready before urgency arrives. Its core materials typically include financial statements, customer or revenue contracts, employment agreements, and an accurate capitalization table. Speed matters because fundraising momentum is fragile. If investors must wait while a company reconstructs its records, attention may shift to another opportunity.
Orloff argues that the total work does not disappear when accounting is postponed. It merely accumulates until the most stressful possible moment. Producing accurate statements promptly signals that a founder can be trusted to manage larger sums of capital.
Speak the Language of Resource Allocation
Investors provide money because they expect it to increase a company’s future value. The capital might fund employees, inventory, infrastructure, or—particularly for AI companies—model usage and inference costs. A compelling pitch must therefore connect the requested investment to a credible set of outcomes.
Founders should be comfortable discussing the trade-offs behind those choices. What happens if the company hires more engineers instead of salespeople? How much runway would an expanded team consume? Which investments produce revenue, and how quickly can the company recover its acquisition costs?
An income statement gives founders a useful framework for this conversation. It moves from revenue through gross margin and operating expenses to profit or loss, allowing each layer of the model to be examined systematically. The goal is not to turn every founder into an accountant. It is to make the economics of the company clear enough that capital decisions can be defended.
Orloff also suggests using AI as a rehearsal partner for fundraising, board meetings, and due diligence. A founder can simulate difficult questions, identify weak explanations, and practice connecting operational plans to financial consequences before entering a high-stakes meeting.
When to Add Professional Financial Support
Software and integrations can give a young startup a reasonable financial foundation from incorporation, even when the founder is not reviewing the system every day. Automation can import transactions, organize cash activity, and maintain a working draft of the books with relatively little manual effort.
Professional help becomes more important as the company gains complexity. Orloff recommends considering a bookkeeper or accountant once revenue enters roughly the $100,000-to-$1 million range. At approximately $10 million in revenue, a business may need an internal finance leader who can build forecasts and guide forward-looking strategy.
That progression reflects a shift in needs. Early accounting focuses on recording what happened. Mature finance functions must also interpret those results, model alternatives, and help management decide what should happen next. As companies add entities to protect assets or intellectual property, they may eventually require a full enterprise resource planning system rather than startup-oriented software.
Why AI Accounting Must Be Dependable
Puzzle raised a $50 million Series A through a single term sheet structured in tranches. Orloff says the investment was intended in part to build infrastructure for financial agents that combine automation with professional judgment.
Reliability is crucial in this domain. Orloff compares accounting to an MRI machine rather than a slot machine: identical inputs must produce consistent outputs. Financial statements submitted to tax authorities, boards, lenders, or investors cannot change unpredictably. Founders may also face personal consequences when they approve inaccurate representations.
Puzzle’s approach therefore emphasizes deterministic processes around AI. Large language models can help a business describe its revenue model, accounting policies, and unusual cases in natural language, but professional oversight remains essential. An accountant still needs to establish the chart of accounts and define the policies by which transactions are treated.
Orloff rejects the idea of completely autonomous accounting. His preferred model combines AI speed with expert-designed controls, aiming to produce rigorous books rather than merely accelerate data entry. In that vision, technology expands access to financial capabilities once reserved for large enterprises, while accountants continue to act as trusted specialists—especially when a company reaches a moment of crisis or complexity.
The Founder Investors Ultimately Want
The strongest fundraising posture is not perfection. It is informed honesty backed by organized evidence.
Orloff’s ideal founder understands the company’s current condition, can explain deviations from the plan, and knows how available resources will be used to improve the outcome. That founder also accepts the disorder inherent in entrepreneurship without using it as an excuse for avoidable financial confusion.
Resilience matters as much as competence. Orloff advises founders to preserve optimism, develop a dependable support network, and focus on constructive actions instead of attaching their identity entirely to short-term results. Investors are not only assessing a spreadsheet; they are evaluating whether the person across the table can navigate uncertainty while remaining candid, disciplined, and adaptable.
The practical lesson is to establish financial visibility early, maintain it continuously, and treat it as part of building the company—not as paperwork to complete before a tax deadline or funding round. When founders know their numbers, they can make sharper decisions, communicate with greater authority, and approach investors before desperation erodes their options.
