Investors back founders who understand the financial reality of their business — not those with the most polished pitch deck. That’s the core message from Sasha Orloff, founder and CEO of Puzzle, a startup that builds financial infrastructure for software companies. Orloff has raised more than $1 billion across multiple companies, and he recently shared the hard-won lessons from those fundraising rounds on the TechCrunch podcast Build Mode.
In the episode, hosted by Isabelle Johannessen, Orloff detailed why messy data, misunderstood metrics, or waiting until the company is nearly out of cash can cost founders apply, valuation, and even a term sheet. He also recounted how he almost lost a term sheet because his data room wasn’t ready — a mistake he says is more common than founders admit.
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Why financial clarity beats a perfect pitch
Orloff’s central argument is that VCs don’t expect startups to be perfect. They expect founders to understand their company’s reality — the good, the bad, and the ugly. He noted that investors are far more concerned with whether a founder can articulate what’s working and what isn’t, and what they plan to do about it, than with whether the numbers are flawless.
This philosophy has shaped how he approaches fundraising at Puzzle, which provides tools to help startups automate their accounting and financial operations. Orloff explained that his own frustrations with managing finances across his previous companies led him to build the product.
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Key metrics founders should know by heart
Orloff emphasized that founders should be fluent in a handful of financial metrics before entering any investor meeting. He listed runway, gross margins, sales efficiency, and revenue growth quality as the most critical. Understanding the story behind these numbers — such as why revenue is growing or where margin pressure is coming from — is what separates confident founders from those who get caught off guard during due diligence.
He also highlighted that revenue growth alone isn’t enough. Investors increasingly examine the quality of that growth, including whether it’s concentrated in a few customers or spread across a diverse base. Sales efficiency, often measured through metrics like the LTV-to-CAC ratio, tells investors how cost-effectively the company acquires customers.
How due diligence evolves from seed to Series B and beyond
Orloff noted that investor expectations shift significantly as a startup matures. At the pre-seed and seed stages, VCs focus on the team, product-market fit, and the size of the opportunity. By Series A and B, the conversation becomes more data-driven, with deeper dives into unit economics, churn, and compliance.
He warned that founders who neglect financial organization early on often face painful consequences later. A disorganized data room, he said, signals a lack of operational discipline and can erode investor confidence just when a founder needs it most.
What founders should prepare for due diligence
Orloff recommended that founders prepare their data room well in advance, including financial statements, cap table details, and compliance documents. He stressed that being proactive about financial organization not only speeds up the fundraising process but also strengthens a founder’s negotiating position.
He also advised founders to be honest about what isn’t working. Trying to hide problems, he said, usually backfires — investors often discover issues during diligence, and the loss of trust can be more damaging than the problem itself.
The role of AI in startup finance
Looking ahead, Orloff discussed how AI could change the way startups manage accounting and understand their financial health. He sees AI-powered tools as a way to automate routine financial tasks and provide real-time insights, allowing founders to make better decisions without needing a large finance team.
This is a natural extension of Puzzle’s mission, which aims to give founders the same financial visibility that large enterprises have. As AI continues to evolve, Orloff expects that financial literacy will become less about manual number-crunching and more about interpreting the insights that automated systems surface.
For founders preparing for their next round, Orloff’s advice is clear: get your financial house in order, understand the story behind your numbers, and be transparent about the challenges. That combination, he says, is what ultimately earns investor trust — and a term sheet.
New episodes of Build Mode drop every Thursday on Apple Podcasts, Spotify, and YouTube.
This article is for informational purposes only and does not constitute financial advice. Fundraising and venture capital investments are inherently risky and volatile; founders should conduct their own due diligence and consult with qualified professionals.
